Weekly Special | June 8, 2015

“Normal” Housing Market Conditions Return

It has been a long time coming, but we are now starting to see evidence that a “normal” relationship between supply and demand have returned to the Tallahassee real estate market.

The graph above shows the number of listings for sale in the Tallahassee MLS each month (blue columns measured on the left vertical axis), as well as the ratio of listings that sold each month (red line, measured on the right vertical axis).

The yellow band marks the “normal” zone for this ratio of listings that sell each month, meaning if the market has a normal relationship between supply and demand, and no seasonal factors are in place, we should see the red dots each month fall within that yellow band.

Of course, we have seasonality in Tallahassee, meaning that we see more homes sold during the warm months than we do the cooler months. Thus we would expect to see red dots within the yellow band and above it during the warmer months, and at or below the yellow band during the cooler months.

Unfortunately, for more than five years, the red dots fell below the yellow band. Tallahassee had far more home sellers than buyers, so the monthly ratio of homes that sold (versus those that did not) remained low.

But look at what has been happening over the past two years. There have been red dots in and above the yellow area, and red dots below it too.

The low ones are still a bit too low, but this picture of the Tallahassee real estate market is definitely trending towards “normal.”

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