Mid-Year Home Sales Report
The Mid-Year 2020 Housing Market Report is a comprehensive analysis of the Tallahassee real estate market at the half-way point in 2020.
If you own a home in Tallahassee, this will give you insight into how your largest asset is doing and let you know where you stand if you would like to move now or in the near future.
If you do not live in Tallahassee, this report is likely to reveal market conditions very similar to your own, though the price-points might be higher or lower.
Today’s housing market report contains so much useful information that I have recorded a video to talk you through the changes in the housing market. For many, taking this information in through video form helps it "stick" a little better.
Mid-Year Housing Market Video Update
Overall, the market is as active as it was four years ago.
The lack of inventory of homes for sale in Tallahassee is impacting buyers’ ability to find homes because the demand is there. We have buyers awaiting each new listing entering the market. To be clear, we need your home if you have been thinking about selling!
Today’s report identifies the segments of the market that are most challenged for supply as we dig deeper into the data. I’m going to start with the overall view, then drill down to the different areas and price ranges in Tallahassee. Finally, we’ll examine what’s happening with foreclosures and mortgage interest rates as well.
By the end of this report, you will be knowledgeable about not only the “big picture” for Tallahassee real estate but also the picture for your specific area and price range.
Year Over Year Home Sales
The next graph shows how each month's sales compared with the same month the year prior.
For the third-straight month, year over year home sales declined in June. The 9.8% drop was smaller than the previous two and might be a sign that some vigor is returning after the onset of pandemic conditions.
Year To Date Home Sales
The next graph shows the number of homes sold during the first half of each year.
Home sales are down 8% in 2020 when compared to 2019 (through June), and right now are about at the same level as what was recorded in 2016. When we compare 2020 to the past 19 years, 2020 trails just seven other (non-pandemic) years.
Year Over Year New Listings
The next graph shows how each month's new fresh listings compared with the same month the year prior. A "fresh" listing is a new listing entering the market for the first time (as opposed to one that was listed for sale and failed to sell in the past).
For the third-straight month, year over year new listings declined in June. The 15% drop was smaller than were the previous two and I believe it is a sign that sellers are starting to return to the market. Time will tell.
Year To Date New Listings
The next graph shows the number of fresh new listings entering the market from January through June of each year.
The year began with a shortage in the inventory of homes for sale, and things are not improving. 2020 has seen 15% fewer new listings this year and it's the worst year on record. I believe this is related to the pandemic, as some sellers have chosen to wait before they sell.
Relative Supply Of Homes For Sale
The next graph shows the relative supply of homes for sale in Tallahassee.
The relative supply of homes is a number that shows use the months of supply of homes for sale (the supply of homes relative to the current rate of demand). A measure of 6.0 is traditionally considered a balanced market, where neither sellers nor buyers have an advantage in the market.
When the relative supply drops below 6.0, the market moves to a seller's market. The opposite is true when the number grows above 6.0 and the market moves to favor buyers.
In the table above, the red cells show sellers' market conditions, orange cells show buyers' market conditions and green shows where the market is balanced. Sometimes, you will see a cell colored green that should be red, but the price point directly higher than it has an abundance of supply that will be moving downwards (NE $500K-$550K is an example).
Overall, the entire market is undersupplied and all four quadrants in Tallahassee are in a sellers' market. Homes priced above $550K in all quadrants remain in a buyers' market.
Activity In The Housing Market
The next graph shows an overall view of housing market activity in Tallahassee over time.
There is a lot going on in the graph above, but if I could just look at one for the whole report, it tells me the most.
The red line records the number of listings each month, the green reports the number of homes sold. The vertical blue lines show the relative supply of homes, and the yellow line shows the one-year trend of the relative supply (currently at 3.5 months of supply).
This graph is telling us we need more homes, and the trend is moving to even more inventory shortages. If we do not reverse this trend, we will see hyper-inflation in our market. Homes are already appreciating twice as fast as historically normal, and we'll see appreciation rates move higher unless more homes come online.
Activity In The Hi-end Housing Market
The next graph shows an overall view of the high-end housing market activity in Tallahassee over time.
This graph is similar to the one above, except that it is limited to the market of homes for sale priced above $600K. The one-year trend of the relative supply is down to 8.5 months of supply, so the high-end market still favors the buyer. The trend is looking good, but it appears as if we are still several years away from luxury homes achieving balance.
Sales Today Versus Normal Market Conditions
The next graph shows the percentage of homes sold each month.
Each month, a red dot is posted to show the percentage of the inventory that sold each month. If there were no seasonality in real estate, we would expect 1/6th of the homes to sell each month (16.7%).
As seasonality is real, would expect to see roughly 4 months above 16.7%, 4 months near 16.7%, and four months below 16.7%. Obviously, these are not normal times.
When the market was coming out of its collapse, we went more than 8 years without a single month falling within the "normal" range. There were just too many homes on the market and it was common for fewer than 1/10th of them to sell each month.
Now, low inventory levels have the opposite results. More than 1/3rd of the homes listed for sale sold last month, the second-highest result in more than 20 years!
Competition For Your Home
The next graph shows how competitive each price range is in the Tallahassee housing market.
If you are thinking about selling your home, this graph will show you what you should expect in the market. Of course, buyers can glean the same important information about the competitiveness of a certain price range.
The green lines measure the number of listed homes that are already under contract with buyers, while the red lines measure the homes without contracts. More than 1/2 of all homes priced under $300K are already under contract, so whether buying or selling, you should know that it is highly competitive out there and you need to be prepared to get the best deal possible.
Too many sellers are leaving money on the table (see how to avoid this with a sound pre-marketing campaign).
Are you curious about where Tallahassee is moving? This next graph shows us our local relocation trends.
Tallahassee's Four Quadrants
The next graph shows the percentage of home sales that fall in each of Tallahassee's four quadrants, shown over the years.
NE Tallahassee dominates the home sales in Tallahassee as 1 of every 2 homes sold in our market are sold in the NE quadrant. NW Tallahassee holds 30% of all homes sold, meaning 80% of all home sales are north of town. The 20% in the south break down to about 15% in SE Tallahassee and 5% in SW Tallahassee.
The next graph shows the supply and demand for homes in NE Tallahassee by price range.
NE Tallahassee is in a VERY STRONG sellers' market for homes priced below $400K and a strong sellers' market under $550K. We don't see buyer's market conditions until we get above that $550K mark.
The next graph shows the supply and demand for homes in NW Tallahassee by price range.
NW Tallahassee is in a strong sellers' market for homes priced below $350K and in a buyer's market for most price ranges above that point (and certainly for homes priced above $550K.
The next graph shows the supply and demand for homes in SE Tallahassee by price range.
SE Tallahassee has a strong sellers' market going for homes priced below $450K, but the rest of the market is in a buyer's market.
The next graph shows the supply and demand for homes in SW Tallahassee by price range.
SW Tallahassee is still a relatively unstable market with only homes priced below $150K joining the sellers' market seen in most of Tallahassee.
Distressed Home Sales
The next graph shows the percentage of homes sold as distressed properties.
The percentage of home sales occurring under "distressed" conditions has hit a ten-year low. This is a positive sign that the market is still getting healthier from the crash that occurred nearly 15 years ago.
Mortgage Interest Rates
The next graph shows 50 years of monthly mortgage interest rates.
Mortgage interest rates hit an all-time low in June, the 2nd month in a row that a new low was set. This means buyers are getting their money for cheap and they want to lock-in before rates return to higher ground.
Your Local Expert In Tallahassee
When moving to, in, or from Tallahassee, you will fare better if you work with a local expert. We are here to help. If you have further questions on the Tallahassee real estate market, you can leave a comment below, give us a call at (850) 366-8917, or drop us a note and we'll give you the local information needed to ensure a successful, smooth transaction.
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