Relative Home Supply Drops In Tallahassee MLS
The Tallahassee MLS shows that the relative home supply in the entire MLS dropped during the month of June. While the Tallahassee Real Estate Market Report mostly focuses on Leon County, Florida, we occasionally look at the overall and surrounding markets including our neighboring counties.
By using information in the Tallahassee Board of REALTORS® Multiple Listing Service (MLS), we can measure the supply and demand for homes in Tallahassee and its surrounding counties. While it is one thing to know how many homes are for sale, we feel that it is more important to know the relative home supply ... the number of homes for sale expressed as the amount of time it will take to consume the entire inventory. Thus, we express relative home supply in terms of "months of supply."
In the graph below, the green line is the one-year trend of annual home sales, while the red line is the number of active listings. The purple line measures (on the right scale) the number of months of supply of homes based upon the current rate of sales (demand).
Presently, our market is getting better, but we are a very long distance from equilibrium between supply and demand.
It is generally accepted that 5 to 6 months of supply in a market brings a balance between supply and demand, with markets below this level being “Sellers Markets,” while those above being “Buyers Markets.”
We are still in a Buyers Market, but if we see demand return to normal levels, we will hit equilibrium much faster than the graph below seems to be indicating. The key is returning to normal for our market to take off.
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