Year over year home sales rose 8% in September, registering the thirteenth-straight month of gains and a growth streak in fourteen of the past fifteen months.
Through September, Tallahassee has recorded an overall 17.3% growth in year-to-date home sales, making 2021 the third-best year on record (trailing only 2005 and 2006 during the housing bubble years).
Follow along as I share two graphs and what they mean for the present and future of the housing market. First, take a look at the ever-shrinking list of homes for sale in Tallahassee and notice that more than half of them are already under contract with buyers (during a month in which we would expect to see well less than twenty percent of them under contract).
Homes For Sale In Tallahassee
Tallahassee Homes for Sale
Year-Over-Year Home Sales
The year-over-year home sales graph shows how each month’s sales compared with the same month the year prior. We analyze this data as it provides insight into the market changes by removing the seasonal influences in the market.
Even a cursory glance at this graph tells you that the current market is hot. There is so much more green than red. In fact, when we take a different view of the market, it shows just how green 2021 has been.
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Year-To-Date Home Sales Are Strong
This next graph plots home sales from January through September of each year, and it shows just how strong 2021 home sales have been through three quarters.
Interest Rates Are Driving Sales
Most of us in the real estate industry will tell you that the only reason this market remains so vibrant is that historic low mortgage interest rates are making buyers come out to participate. For this reason, I believe that the duration of this housing market growth cycle will be determined by the future changes to mortgage interest rates.
With rates today still sitting near 3% for a 30-year fixed-rate loan, buyers are able to get so much more home for their money than in the past. This has created a real fear of missing out for many buyers, but it also means that rising rates could very well bring a “sticker shock” to the market that causes home sales to plummet until wage inflation helps home affordability to recover.
Pay attention to the pace at which mortgage interest rates rise, as it will determine just how vibrant home sales remain in the coming months and years.
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