Weekly Special | November 13, 2016

Why We Should Expect Growth In 2017

We expect to see continued growth in the number of home sales in Tallahassee for the 2017 calendar year.

The graph above shows two sets of home sales data. The bright green shaded area shows the average number of homes sold daily and recorded with the Leon County Property Appraiser, while the light green area shows the subset of sales that are reported through the Tallahassee MLS.

It is the bright green area that shows us “the whole market,” and currently we are seeing the same number of closed home sales each day as we saw 18 years ago.

Leon County Population Has Grown Perhaps the most compelling reason that we believe home sales must rise is because our population is 26% larger today than it was eighteen years ago. Shouldn’t (generally speaking) “more” people buy “more” houses if all else is equal?

Sure, there are important short-term trends that can impact the relationship between population size and home sales, but we expect the long-term to always seek “normal” conditions.

Our graph above shows that the short term trend is already moving higher, while the long-term trend has not yet changed courses.

Normal in the 1990s was 1 home sold each year for every 44 people living here, yet this year we are only seeing 1 home sold for every 52 people living here.

This difference is significant and currently represents about 18% of growth potential before Leon returns to return to normal (more than 1,000 additional home sales).

I do not expect to return to this normal level in 2017, but we will be moving in that direction and thus see more homes sold than we’ve recorded since 2006.

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