Here's A First: Real Estate Blogger Called 'Too Pessimistic'
I have been a real estate blogger since 2007, and the one thing that I feel separates me from the hundreds of thousands of other real estate agents and brokers who write a blog is my focus on housing market conditions. Sure, the Tallahassee Real Estate Blog covers a wide range of niche topics relating to Tallahassee real estate, but at its core, it is a blog about the state of the housing market.
I get quite a bit of reader feedback, and mostly the comments and emails that I receive are formed as questions or opinions that either support or refute my own. But yesterday, I received a critique of my "market sentiment" from long-time reader "Bob" who suggests that I might be too pessimistic in the tone of my writing. He wrote:
Suppose I had access to a time machine, and I was going to drop you off at some point in time that was unknown to you. And I told you, “you are trying to sell a house now or next year, and you must decide now whether you want to sell now or wait” and you didn’t have the benefit of looking at a calendar. The odds are far, far, in your favor to delay selling that house, right?
I would agree with this statement, so long as I had no clue "when" I was being sent. Historically, the Tallahassee housing market has seen a steady growth in property values, and I strongly believe that when we move forward into the future, we will see a continuation of this trend. It basically "has to be true" so long as we see inflation, population, and wage increases over time. Even the biggest real estate bear out there does not believe that 50 years from now it will be cheaper to build a house than the cost of doing so today.
However, if I had a hint that I was being dropped off sometime in the next few years, I am fairly certain that home values will still be dropping, thus a delay in selling that house will cost the homeowner money. When values are dropping, the seller is in a hurry. When values are rising, the seller has the luxury (if time permits) to wait for buyers to come-around to the asking price. The law of scarcity drives real estate values, and right now, homes for sale in Tallahassee are not scarce!
But I would suggest that we need to focus on something missing from this Q&A, and that is seller motivation. Most people do not view their homes as commodities and continuously think about selling. The fact is, most of us live in a home and only consider selling a home when we feel that we need to move. So the scenario presented by Bob (time travel not withstanding) is a bit far-fetched. For most sellers, the time it takes to sell a home is important because they want to take advantage of an opportunity (new job, desire for new home, etc.) or avoid a consequence (reduce expenses, avoid foreclosure, etc.).
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Interesting blog today.
I took away three key words from your response- Inflation, population and wage increases over time.
I think those are the biggest hurdles for TLH in the next few years, aside from lack of demand.
Your housing is still way more expensive than in many other parts of the country, good jobs that would attract new population and support your housing prices are scarce, and there are no prospects of any major employers coming there any time soon. I agree that your prices are likely to continue to fall for awhile, particularly if the shadow inventory starts to come on the market. Maybe the reluctance of those folks to sell now is keeping prices higher than they might otherwise be.
Something else I wanted to ask you about. I've seen two reports in recent weeks suggesting that up to 20% of the housing units in FL are vacant. This cant possibly be true, unless they are counting every structure in FL with 4 walls and a roof. If it is true, I'll be heading down as soon as prices fall another 50%.
Best to you and the family.
Patrick, thanks for commenting.
Geographic area Total population Housing units
Total Occupied Vacant Vacancy Rate
Florida 18,801,310 8,989,580 7,420,802 1,568,778 17.5%
Vacancy rate in Florida is 17.5%, with most of the higher areas at the coast. Come 'on down!
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