Weekly Special | January 3, 2016

Follow The Money To Uncover Market Changes

The Tallahassee real estate market improved solidly in 2015, and though some real estate companies have yet to post their final sales, I can confidently say that there was at least 10% (and likely 11%) more homes sold in Leon County in 2015 than there were in the year prior.

The rise in home sales cannot occur without changes in buyer behaviors, so I have created a graph of the source of funds for buyers in Tallahassee, going back 13 years.

The four largest sources of funds are shown individually (Convention loans, Cash, FHA loans, and VA loans), while all other sources are lumped together.

A few key trends stand out to me. First of all, conventional loans remain the top choice for homebuyers, as nearly half of all home purchases last year was financed with one.

Secondly, the number of cash buyers in Tallahassee hit an all time high last year, though percentage-wise there was a slight decline. More than 1,000 homebuyers were able to buy their home paying cash in 2015.

I believe the rise in cash buyers likely equates to increased investor activity, as in “follow the money.” I think wealthier investors are patiently accumulating properties that are being sold at prices far below replacement value. It will take a further examination across price ranges and market segments to validate this conclusion though.

The original one-page Weekly Special PDF is still available.