The Upside To Tallahassee Housing Inventory January 30, 2010
We have reported the glut of homes for sale in Tallahassee on our web site and in our office for well over two years now. Even as real supplies continue to shrink, relative supply has grown and receded, only to grow again. With a current 12.5 months of supply of homes, is there any good news in site for the Tallahassee real estate market?
The simple answer is yes. We are consuming the supply and we know there is more in the shadow inventory. But we are consuming supply. Today's supply is high at 12.5 months of supply, but if we look at today's housing supply with historic demand levels, you can see that the actual number of homes on the market in Tallahassee today would have made for a Sellers' market in 5 of the past 7 years.
The real estate graph above shows us that if demand returned to a level similar with any year from 2003 to 2007, we would have less than 6.0 months of supply. One way to interpret that is that our current "glut of homes" problem is as much or more a demand problem than it is one of supply. As we see prices continue to drop, more buyers will be enticed into the market, and the correction will accelerate.