Looking For Signs Of A Housing Market Collapse?

In my pursuit to find evidence of an impending housing bubble, I continue instead to find evidence of the opposite.The real estate doomsayers are getting louder in their calls for the collapse of the housing market, so I continue my quest to find supporting (or opposing) evidence in order to guide our customers.

During the buildup of the housing bubble in 2006, we saw the inventory of homes for sale continue to swell, even as new contracts on homes declined. For this reason, I keep a very close eye on the supply of homes for sale. In my pursuit to find evidence of an impending housing bubble, I continue instead to find evidence of the opposite.

Today, we'll look at this new trend and speculate on its impact on home prices. First, take a quick peek at the supply of homes for sale in Tallahassee. You will notice that as prices drop below the top 5% of the market, the percentage of homes under contract with buyers rises to levels we do not normally see in October.

Tallahassee Homes For Sale

820 Properties
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Housing Market Collapse?

The Entire Housing Market

Chris Farley - Van down by the riverWhen we look at the overall housing market, we need to consider the options consumers face. They can buy or they can rent. They can live in a single-family home, a multi-family home, a mobile home, a dorm, an extended-stay hotel or hospital, student dorms, military barracks (or even in a van down by the river).

All of these property types must be considered when evaluating the overall health of the housing market because strength in one could very well cause weakness in another. For example, if a significant percentage of single-family home investors decided to sell their homes, it would add homes to the "for sale" market while removing homes from the "for rent market." In the short term, we might see home price growth slow down while seeing rents rise.

So it is important to study each segment of the housing market, looking for supporting or opposing trends that can provide insight into future market movements.

Recent Housing Market Reports

Top 10 Tallahassee Neighborhoods
If you want to know where homebuyers chose to live in 2021, then this video was produced specifically for you. Follow along as I share the top-ten selling communities in Tallahassee in 2021, with insight on what it costs to live in each neighborhood as well as the number of homes that sold.
Top 10 Neighborhoods to Live in Tallahassee for Families
Whether you're a young family just starting out or an established one looking for a place to raise your children, you will find Tallahassee a welcoming and family-friendly environment that's sure to meet your needs.
Wealth Gap Widens Luxury Home Market Booms Unprecedentedly
This luxury home market report shows that high-end homes are selling better than ever. 7 essential graphs that tell the story of the luxury home market.
Top 10 Tallahassee New Construction Neighborhoods
Living In Tallahassee. The top-ten selling builder communities in Tallahassee in 2022, with insight on what it costs to live in each neighborhood as well as the number of homes that sold.
Top 10 Patio Home Neighborhoods In Tallahassee
Real Estate: Patio homes are growing in popularity in Tallahassee as much of the new construction sold in tract housing neighborhoods are on lots much smaller than homes built before 2000.
How Bad Is It? SHOCKING Building Permits Report!
The lack of home affordability has become a widely discussed issue in the media - the shortfall in new single-family home permits and multi-family property permits and construction exacerbates the current housing crisis.
Existing Homes Update - Tallahassee Real Estate
Just as you find in most local US housing markets, the number of homes for sale in Tallahassee remains far too few, measuring below 900 properties and just above 500 when you remove those already under contract with buyers.
Are Wages Keeping Up With Rising Home Prices
Home prices are rising. Mortgage interest rates are rising. Are people earning enough money to buy homes today, or is the home affordability crisis getting worse?
Economic Outlook For The Housing Market
Joe Manausa gives an update on the economic outlook for Tallahassee and the US housing market. Includes housing market forecast, housing market activity, and new construction analysis, and reveals how Tallahassee compares with the overall US housing market.
Building Permits Reveal Major Housing Crisis
How do we know there is a major housing crisis brewing? Look no further than building permits! This video examines building permits in detail, as the issue of home affordability is going to become one of the most prominent topics for many years in the national media.
6 Housing Market Rumors Debunked (1 Confirmed)
7 different housing market rumors are perpetuated as “FACT” in various forms of "hype." Discussion of this "housing market news" has been ongoing for years, so today, I want to put them all to rest.
Tallahassee Real Estate Report March 2022
The pace of this video moves fast, and I cover more than ten key real estate trends, so you might want to go back to any graph that you want to spend more time on.
Home Ownership Is Radically Different For Millennials
This is a simple millennial housing case study that will clearly show that the millennials will face a housing market like no other generation going back to post-World War II.
Are We Overbuilding Again?
I've been asked recently for my opinion on the number of homes being built in the US. Specifically, people are wondering if the ghost of 2006 has come back to bring more homes to the market than what can be consumed?
How Soaring Home Prices Are Impacting The Housing Market
Report includes three graphs that show just how far home prices have risen as we move towards conditions where home affordability might become the greatest challenge the housing market has EVER embraced.

Rents Are Soaring Too

I have been saying that we need more homes for the past five years. The US population has increased by more than 30 million people since the housing bubble burst, yet the pace of new home production has dropped dramatically.

The lack of new home production has created scarcity in the "for sale" market, and I wondered if it was having a similar impact on the "for rent" market. The graph below plots the median market rent in the US since 2014.

Graph of median market rent October 2021

The graph above was created from a dataset produced by Zillow, created to share rental rates from most of the larger US metropolitan areas. Zillow estimates the median by cutting a slice out of the middle of the rental market (by choosing listed rents that fall into the 40th to 60th percentile range for all homes and apartments). The blue field plots the median monthly rental rate, while the red line reports the year-over-year change of this rental rate.

Does this look familiar to you? It sure does to me!

Apparently, it’s not just home prices and values that are skyrocketing, so too are rental rates. August rental rates were nearly 13% higher than were rental rates in August of last year, and that is awfully close to the runaway rate of appreciation that we’re seeing with existing home sales. This only reinforces my concerns about home affordability and a decline in the homeownership rate.

Future Housing Market Reports

I'm exploring new data sources and hope to produce an examination of rents, prices, and median incomes. When adjusted for inflation, I believe it will give us a clear view of home affordability and where the market will be heading when the Fed gets aggressive on interest rates and we see these (wonderful) historically low mortgage interest rates fade away.

If you have any thoughts or questions on how we can better explore local and US housing market conditions, just drop a comment below and I'll consider it for future posts.

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