Real Estate Supply And Demand November 2015
The month of November is well under way, so today we'll take a current look at real estate supply and demand in the Tallahassee real estate market.
Every month we compile a list of all the homes for sale in Tallahassee and compare it to the total number of home sales over the past twelve months.
This provides a look at both the real supply as well as the relative supply of homes in Tallahassee. This is very important information, whether you want to buy a home, sell a home, or both, as it prepares you for the specific market for homes similar to your own (or the one you want to purchase).
Real Estate Supply And Demand In Tallahassee
First things first ... the relative supply of homes continues to improve in Tallahassee.
In the real estate graph above, we measure the number of sales and listings each month (green line and red line respectively, measured on the right vertical axis). We then calculate the relative supply of homes (measured as months of supply on the left vertical axis) and then plot the one-year trend of relative supply, which is shown as a blue line.
That blue line is now down to just 6.4 months of supply, a level just slightly above market equilibrium. It is the lowest recorded relative supply of homes for sale in Tallahassee in over 9 years! This is good news.
While this graph shows the state of the housing market in Tallahassee, it is not useful for homeowners and buyers looking to enter into the market. For them, they need the specific relative supply of homes in each area of interest and the price range in which they plan to negotiate.
That information can be downloaded by clicking the image on the right.
What you will find on this handy reference form is the months of supply of homes by area and price range in Tallahassee.
Buyers need to know the liquidity and current market conditions before they tender an offer. Do you offer above full price? At full price? Below full price? These questions are answered with an understanding of how much competition you (as a buyer) are going to have with other buyers for the home that you selected.
Say for example you found the best home available in an area with plenty of sales and only 4 months of supply. You better know that other buyers have likely found it too so your offer better be strong.
Contrarily, if you found a home in an area and price range with few sales, and the months of supply are well above 10 months, you can likely expect that few other buyers will be competing for the home. It opens up room for you to try to negotiate a better price (while having a minimal chance of losing the home to another buyer).
The key is to understand, whether selling or buying, your position in the real estate negotiation.
If you would like more information on how to use our monthly market data to get a better deal on your next real estate transaction, simply drop me a note and we'll schedule a time to review your situation and see how we can help save you money.