Saturday, April 28, 2018

Tallahassee 1st Quarter Real Estate Market Report

Bobby's Real Estate Column   
1st Quarter 2018 Tallahassee Residential Real Estate Market Snapshot And Year Over Year Market Statistics.

The residential real estate market in Tallahassee in the first quarter of 2018 took off like a rocket with both the number of properties sold and home prices seeing huge gains compared to the first quarter of 2017.  While we saw home prices and the number of properties sold go up, the number of properties available for sale went down.  Shrinking levels of housing inventory is a trend we have consistently seen over the past two or three years, and that trend continued in the first quarter of this year.  The combination of increasing demand for homes and a decreased level of housing supply to meet the growing demand, has created a fiercely competitive seller's market where homes are flying off the market quickly and at prices we have not seen in over a decade.  This combination of increasing demand for homes and shrinking supply of homes has led to a significant drop in the average time it took a home to sell in the first quarter of 2018 compared to the same time a year earlier.  The average sale price/list price ratio, which measures how much a home sells for compared to it's listing price, went down very slightly in the first quarter of  2018 from the first quarter of 2017.  Last but not least, distressed sales (foreclosures and short sales) continued to make up a smaller percentage of overall sales.  Distressed sales typically sell at a discount compared to homes that are not distressed, and they bring down the values of surrounding properties.  The decreasing levels of distressed sales is a consistent trend we have seen since 2012 when the housing market began it's recovery.  

 
The number of properties listed for sale was down 1.5% in the first quarter of 2018 compared to the first quarter of 2017.  The number of homes that sold in the first quarter of 2018 increased by a whopping 11.9% compared to the first quarter of 2017.  An improving economy and a coming of age of the millennial generation,  who many are now deciding to purchase their first home, caused a boom in home sales in the first quarter of 2018.  Unfortunately, the boom in demand for homes has been met with a shrinking level of homes to choose from.  The lack of adequate housing inventory is a long term issue in my view, and it could take years before inventory levels reach normal levels.  Years of inadequate construction of new homes following the housing bust combined with the fact that people are staying in their homes longer are the main two causes of the shortage of available homes for sale.  

Home prices rose 8.6% in Tallahassee in the first quarter of 2018 compared to the first quarter of 2017.  Historically, homes have increased by about 3%-5% per year, so the 8.6% year over year increase we saw in Tallahassee in the first quarter of this year was well above what would be considered average.  This is of course great news for homeowners looking to sell their homes.  The rapidly increasing home prices are making purchasing a home much tougher for home buyers though since increases in home prices are far out outpacing increases in people's wages.  When you also factor in increasing mortgage rates on top of increasing home prices, the cost of owning a home has gone up quite a bit over the last year.  

The average amount of time it took a home to sell in the first quarter of 2018 went down a whopping 24.4% compared to the first quarter of 2017.  On average it only took 68 days for a home to sell in the first quarter of 2018 compared to 90 days in the first quarter of 2017.  The reason for this is simple.  Fewer homes available for sale combined with an increased demand for homes is causing homes to sell much quicker than last year.  

The average sale price/listing price ratio, which measures the average of what homes are selling for compared to what they are listed for, remained flat for the most part going down only very slightly. In the first quarter of 2018 the average sale price/listing price ratio was 97.69% compared to 97.89% in the first quarter of 2017.  This means that in the first quarter of 2018 the average home sold for 97.69% of the asking price.  This high sale price/listing price ratio confirms that we are in a seller's market. 

Distressed sales only made up 4% of total sales in Tallahassee in the first quarter of 2018.  This is down from the first quarter of 2017 when distressed sales made up 6.3% of total sales.  As mentioned earlier, fewer distressed sales is indicative of the fact that the real estate market and the economy as a whole are improving, and is also a good indication that home prices will continue to increase for the foreseeable future.  

 
Overall, the real estate market here in Tallahassee is very robust with lots of activity.  Despite the very low levels of housing inventory available for sale, home sales have continued to increase sharply.  If we had more homes available for sale, home sales would probably be even higher.  The only aspect of our local housing market that could be considered bad is the lack of homes available for sale.  don't expect this problem to go away anytime time soon.  We need a boom in new housing construction to provide the needed supply of homes to meet the growing demand of home buyers.  A shortage of land to build on combined with increasing construction costs and a shortage of construction labor is making it tough for builders to build homes...especially homes in the lower price ranges which is where the biggest shortage of homes exists.  

 
In the year ahead I would expect demand for homes to continue to grow as the economy improves and more and more people begin to feel the extra income from the tax cut legislation that passed in December of 2017.  I expect inventory of homes to remain well below adequate levels.  I would also expect to see interest rates on home loans increase throughout the end of the year.  I think we could expect the average rate on a 30 year fixed rate mortgage to rise to 5% by year end.  If you are a home buyer I would not delay making a purchase if you are in the market.  Affordability will continue to get worse for the foreseeable future.  If you are a home seller, now is a great time to sell your home.  If you price your home right and you get it in great condition so it shows well, you will sell it for good money and quickly.  

For a list of the the real estate metrics for Tallahassee as a whole as well as for each quadrant of Tallahassee, please see below. 


Tallahassee as a whole

  • Listings decreased by 1.5% (1,562 Homes listed for sale)
  • Sales increased by 11.9% (977 properties sold) 
  • Average sale price increased by 8.6% (Average sale price was $212,967)
  • Average Sale price/list price ratio decreased by 0.2% (97.69%)
  • Average days on the market to sell decreased by 24.4% (68 days on the market before selling) 
  • Proportion of distressed sales to total sales decreased by 2.3% (distressed sales made up 4% of total sales) 

 
Northeast Tallahassee

 

  • Listings increased by 2.2% (780 properties listed for sale) 
  • Sales increased by 15.5% (491 properties sold)
  • Average price increased by 0.4% (Average price was $266,783)
  • Sale price/list price ratio decreased by 0.58% (average sale price/list ratio was 97.76%)
  • Average days on the market decreased by 30% (57 days on the market on average before selling) 
  • The proportion of distressed sales to total sales increased by 0.2% (distressed sales made up 2.6% of total sales) 

 
Northwest Tallahassee


  • Listings decreased by 12.5% (441 properties listed for sale) 
  • Sales increased by 12.6% ( 268 properties sold) 
  • Average sale price increased by 14.4% ( average sale price was just  $150,288) 
  • Average sale price/list price ratio increased by 0.46% (Average sale price/list price ratio was 97.76%)
  • Average days on the market before selling went down 31.5% (76 days on the market on average before a home sold) 
  • The proportion of distressed sales compared to total sales decreased by 3.2% (distressed sales made up 5.6% of total sales) 

Southeast Tallahassee

 

  • Listings Increased by 8.8% (236 properties listed for sale)
  • Sales increased by 2.1% (144 properties sold) 
  • Average price increased by 42.7% (Average sale price was $201,109)
  • Average sale price/list price ratio decreased by 0.12% (sale price/list price ratio was 97.77%) 
  • Average days on the market before a home sold decreased by 6.3% (74 days) 
  • The proportion of distressed sales compared to total sales decreased by 7.1% (distressed sales made up 4.2% of total sales)  
Southwest Tallahassee
  • Listings increased by 7.9% (109 properties listed for sale) 
  • Sales increased by 7.2% ( 74 properties sold) 
  • Average sales price increased by 26.1% (Average sale price was $105,964) 
  • Average sale price/listing price ratio increased by 3.11% ( Average sale price/listing price ratio was 95.83%) 
  • Average days on the market before a property sold decreased by 7.9% ( 93 days) 
  • The proportion of distressed sales compared to total sales decreased by 4.8% (distressed sales made up 6.8% of total sales) 

Thursday, February 8, 2018

4th Quarter Tallahassee Residential Real Estate Market Report

4th Quarter 2017 Tallahassee Residential Real Estate Market Snapshot And Year Over Year Market Statistics.

The residential real estate market in Tallahassee continued the same trends in the 4th quarter of 2017 as it did in the previous 3 quarters of the year. There was one noticeable difference though in the 4th quarter from the rest of the previous quarters of 2017.  The number of properties sold actually went down slightly in the 4th quarter of 2017 compared to the 4th quarter of 2016.  In the previous quarters in 2017 year over year sales were slightly up, but in the 4th quarter, year over year sales went down. 

Besides the number of properties sold though, in the 4th quarter of 2017 all of the other metrics continued to trend in the same direction as we have seen over the last year.  The number of properties listed for sale went down and home prices continued to go up.  The number of days on average it took to sell a property went down.  The sale price/list price ratio (how much a home actually sells for compared to the price the home is listed for sale at) went up, which means homes are selling closer to their asking price.  Finally, distressed sales (foreclosures and short sales) continued to make up a smaller percentage of our total sales.  

The number of properties listed for sale (i.e. the number of homes available for sale on the market) continued to shrink the the 4th quarter of 2017 giving home buyers fewer homes to choose from compared to the same time a year earlier.  We saw the number of homes available for sale drop 2.1% in the 4th quarter of 2017 compared to the same time a year earlier.  As the number of homes available for sale continues to drop it's making it harder and harder for home buyers to find the right property in a reasonable time frame.  Because of this, it seems that some home buyers are starting to hold off buying because they don't have much to choose from.  This seems to be leading to decreased home sales. 

Home sales decreased by 1.1% in the 4th quarter of 2017 compared to the 4th quarter of 2016.  This is only a very small drop, so I don't think it's anything to worry a lot about.  The economy has been improving with jobs increasing rapidly.  People's wages are going up and consumer confidence is strong.  Given the positive economic circumstances you would think that home sales would go up, and normally they would.  The problem is that the supply of homes available for sale is not large enough to meet the growing demand for homes. As a result, many would-be home buyers are continuing to rent since the supply of homes for sale is so small.  

Despite the slight year over year dip in the number of homes sold in the 4th quarter of 2017, year over year home prices continued to modestly increase in the 4th quarter of 2017.  Home prices saw an increase of 2.4% in Tallahassee in the 4th quarter of 2017 compared to the same time period a year earlier.  This is slightly below the rate of increase that we saw in the earlier quarters of 2017, but it's still a healthy rate of growth when we you look at historical rates of price appreciation in the housing market. 

The average number of days it took for a house to sell in the 4th quarter of 2017 went down by 16.7%  going down from 84 days in the 4th quarter of 2016 to only 70 days in the 4th quarter of 2017.  The decrease in the number of homes available for sale is most likely the main reason for the decrease in the number of days it took a home to sell in the 4th quarter of 2017.  This is great news if you are looking to sell your home. 

The sale price/listing price ratio  also went up slightly in the 4th quarter of 2017 compared to the 4th quarter of 2016.  In the 4th quarter of 2017 homes in Tallahassee on average sold for 97.95% of their asking price.  In the 4th quarter of 2016 homes sold for only 97.33% of their asking price.  This very high sale price to listing price ratio is indicative of the fact that we are in a very strong seller's market.  

Finally, distressed sales (foreclosures and short sales) in the 4th quarter of 2017 made up a smaller percentage of overall sales compared to 4th quarter of 2016.  In the 4th quarter of 2017, distressed sales made up only 5% of overall sales compared to 7.9% in the 4th quarter of 2016.  This year over year reduction in distressed sales in the 4th quarter of 2017 is a continuation of a long trend starting in 2012 of a declining number of distressed sales.  Distressed sales generally sell at a discount compared to homes that are not distressed, and they tend to bring down property values of surrounding properties.  The continued reduction in the number of distressed sales that we saw in the 4th quarter of 2017 is an indication that our real estate market is getting stronger, and will lead to more long term price stability.  

Overall, demand for housing is very strong. An improving economy along with increasing jobs and wages seems to be fueling home buyer demand. Young first time home buyers are starting to make up a larger share of the home buyer market as well.  The limited supply of housing inventory is constraining the number of home sales though, and many would-be home buyers are opting to rent instead of buying. 

Over the next year I would expect housing inventory to remain scarce.  I would also expect to see interest rates on home loans rise.  The raising of interest rates and the lack of housing inventory will probably slow down price appreciation a little bit compared to what we have seen over the last couple of years. It might also slow down the number of homes sold as well.  The housing market will be robust this year though, and homes that are priced right and show well will continue to sell very fast.  

For a list of the the real estate metrics for Tallahassee as a whole as well as for each quadrant of Tallahassee, please see below. 


Tallahassee as a whole

  • Listings decreased by 2.1% (1,050 Homes listed for sale)
  • Sales decreased by 1.1% (884 properties sold) 
  • Average sale price increased by 2.4% (Average sale price was $209,829)
  • Average Sale price/list price ratio increased by 0.62% (97.95%)
  • Average days on the market to sell decreased by 16.7% (70 days on the market before selling) 
  • Proportion of distressed sales to total sales decreased by 2.9% (distressed sales made up 5% of total sales) 

 
Northeast Tallahassee

 

  • Listings increased by 9.7% (520properties listed for sale) 
  • Sales increased by 3.9% (449 properties sold)
  • Average price decreased 1.6% (Average price was $266,369)
  • Sale price/list price ratio increased by 0.74% (average sale price/list ratio was 98.2%)
  • Average days on the market decreased by 17.6% (61 days on the market on average before selling) 
  • The proportion of distressed sales to total sales decreased by 2.5% (distressed sales made up 3.1% of total sales) 

 
Northwest Tallahassee


  • Listings decreased by 1% (289 properties listed for sale) 
  • Sales decreased by 5.2% ( 239 properties sold) 
  • Average sale price increased by 5.5% ( average sale price was just  $140,270) 
  • Average sale price/list price ratio increased by 1.05% (Average sale price/list price ratio was 97.62%)
  • Average days on the market before selling went down 15.8% (75 days on the market on average before a home sold) 
  • The proportion of distressed sales compared to total sales decreased by 3.7% (distressed sales made up 4.6% of total sales) 

Southeast Tallahassee

 

  • Listings decreased by 6.6% (169 properties listed for sale)
  • Sales increased by 2.1% (143 properties sold) 
  • Average price increased by 1.5% (Average sale price was $171,115)
  • Average sale price/list price ratio increased by 0.14% (sale price/list price ratio was 97.91%) 
  • Average days on the market before a home sold decreased by 15.8% (74 days) 
  • The proportion of distressed sales compared to total sales increased by 2% (distressed sales made up 8.4% of total sales)  
Southwest Tallahassee
  • Listings decreased by 6.1% (77 properties listed for sale) 
  • Sales decreased by 25.7% ( 52 properties sold) 
  • Average sales price increased by 7.1% (Average sale price was $109,914) 
  • Average sale price/listing price ratio decreased by 2.27% ( Average sale price/listing price ratio was 94.9%) 
  • Average days on the market before a property sold decreased by 24.2% ( 91 days) 
  • The proportion of distressed sales compared to total sales decreased by 10.8% (distressed sales made up 13.5% of total sales) 

Saturday, October 14, 2017

Tallahassee 3rd Quarter Real Estate Market Report

3rd Quarter 2017 Tallahassee Residential Real Estate Market Snapshot And Year Over Year Market Statistics.

The residential real estate market in the 3rd quarter of this year pretty much was a continuation of what we saw in the 2nd quarter earlier this year.  Year over year in the 3rd quarter,  home prices were up, the number of properties that sold went slightly up, and the number of homes listed for sale continued to go down leaving home buyers with fewer homes to choose from compared to the same time last year.  The average number of days on the market to sell a home went down, the sale price to list price ratio (what a home sells for compared to it's listing price) remained flat for the most part compared to a year ago.  Lastly, distressed sales (foreclosures and short sales) continued to drop making up a smaller percentage of total overall sales. 

 
The one issue that we have in our local real estate market (as well as state and national) is the vast shortage of homes for sale on the market.  Right now we are operating at about a 3 months supply of housing  inventory in Leon County, which means that at the current pace of sales it would take 3 months for all the homes to sell if no more homes were listed on the market.  A normal market has about a 6 months supply of housing inventory.  In Leon County in this 3rd quarter, the number of listings available for sale went down 4.9% compared to the 3rd quarter of 2016.  Buyers are faced with fewer choices now days, creating a tough market to buy a home. Buyers are having to wait longer to find the right home, and multiple offers on homes are commonplace in this market. 

 
The number of properties that sold continued to increase in the 3rd quarter of this year compared to the same time last year.  Year over year home sales went up by 2.3% this 3rd quarter.  An improving economy along with more jobs and higher wages are fueling a demand in home buying. People feel much more confident in the housing market, and the skepticism that home buyers held about buying a home in the years following the housing market crash, is seeming to finally fade away.   

 
As the number of properties available for sale has decreased and the demand for homes is continuing to increase, home prices continued to go up in the 3rd quarter of 2017.  Year over year home prices went up by a strong 4.9% in the 3rd quarter of this year.  While a 4.9% increase in value is a very good, it falls within the historical 3%-5% a year increase in home values which is considered both healthy and sustainable.  What this means is that these price gains we are seeing are more than likely a permanent long term price increase instead of a home price bubble.  This should give homeowners and potential home buyers confidence that our real estate market is healthy, home prices will most likely remain stable, and buying a home is a solid long term investment. 

 
The number of days on the market that it took a home to sell went down pretty drastically in the 3rd quarter of this year compared to the same time a year ago.  The year over year average days on the market dropped by 19.8%, coming down from 81 days in the 3rd quarter of 2016 to only 65 days in the 3rd quarter of 2017.  Fewer homes for sale along with an increasing demand for homes has clearly been the cause of homes selling quicker this year than last.  

 
The average sale price/listing price ratio, which measures how much a home sells for compared to it's listing price, stayed about the same in the 3rd quarter of this year compared to the same time a year ago.  It went down just 0.1% this year,  with the average home selling for 97.83% of it's listing price.  This high sale price to listing price ratio once again is another indication that we are in a very strong seller's market. 

 
Finally, distressed sales (short sales and foreclosures) continued to drop like a rock in the 3rd quarter of 2017.  Distressed sales only made up 3.7% of total sales in the 3rd quarter of 2017.  This is great compared to 3rd quarter of 2016 when distressed sales made up 8.3% of total sales.   Fewer distressed sales leads to a stronger increase in home values since distressed sales typically sell at a discount driving down values of neighboring properties. 

 
Overall our local real estate market is very strong.   Demand for homes is solid and getting even stronger as the economy continues to improve.  Home prices are going up at a steady and sustainable rate.  Distressed sales are becoming harder and harder to find as the inventory of distressed sales continues to dwindle down.  The only problem we have is the lack of housing inventory available.  Unfortunately this is not going to be a quick fix.  We have had about a decade following the recession, of very low levels of new construction.  Now that the pent up demand for homes has been released with the vast improvement of the economy, we now don't have enough inventory available to meet that demand.  Good news is that construction over the past year or so has finally ramped up, and in probably about 3 years or so we'll have a better balance of homes available to meet the home buyer demand.  There are a few large subdivisions of new homes being built in Tallahassee right now which over the next few years should supply a very large number of new homes.  

 
Continue to watch out what is going on with interest rates too.  The Federal Reserve has announced that it will start to sell off it's treasury bond holdings which will have a direct impact on mortgage rates.  The Fed has been raising the Federal Funds Rate the past couple years, but the Federal Funds Rate more so affects credit card rates and business/commercial loan interest rates then it does mortgage rates.  The selling of the treasury bonds will have a direct impact on mortgage rates though.  

The year over year real estate market metrics for Tallahassee as a whole, as well as by quadrant, are listed below. 

Tallahassee as a whole

  • Listings decreased by 4.9% (1,370 Homes listed for sale)
  • Sales increased by 2.3% (1,181 properties sold) 
  • Average sale price increased by 4.9% (Average sale price was $205,881)
  • Average Sale price/list price ratio decreased by 0.1% (97.83%)
  • Average days on the market to sell decreased by 19.8% (65 days on the market before selling) 
  • Proportion of distressed sales to total sales decreased by 4.6% (distressed sales made up 3.7% of total sales) 

 
Northeast Tallahassee

 
  • Listings decreased by 5.3% (701properties listed for sale) 
  • Sales decreased by 2.7% (560 properties sold)
  • Average price increased by 7.4% (Average price was $277,393)
  • Sale price/list price ratio decreased by 0.21% (average sale price/list ratio was 97.82%)
  • Average days on the market decreased by 22.2% (56 days on the market on average before selling) 
  • The proportion of distressed sales to total sales decreased by 3.6% (distressed sales made up 1.6% of total sales) 

 
Northwest Tallahassee

 
  • Listings decreased by 3% (385 properties listed for sale) 
  • Sales decreased by 5.6% ( 356 properties sold) 
  • Average sale price increased by 10% ( average sale price was just  $136,544) 
  • Average sale price/list price ratio increased by 0.47% (Average sale price/list price ratio was 97.96%)
  • Average days on the market before selling went down 27% (67 days on the market on average before a home sold) 
  • The proportion of distressed sales compared to total sales decreased by 4.2% (distressed sales made up 5.6% of total sales) 


Southeast Tallahassee

 
  • Listings decreased by 8.5% (195 properties listed for sale)
  • Sales increased by 9.4% (186 properties sold) 
  • Average price decreased by 6% (Average sale price was $171,115)
  • Average sale price/list price ratio decreased by 0.54% (sale price/list price ratio was 97.94%) 
  • Average days on the market before a home sold decreased by 9% (70 days) 
  • The proportion of distressed sales compared to total sales decreased by 8.1% (distressed sales made up 4.8% of total sales)  
Southwest Tallahassee
  • Listings decreased by 3.3% (89 properties listed for sale) 
  • Sales increased by 14% ( 79 properties sold) 
  • Average sales price increased by 22.1% (Average sale price was $93,263) 
  • Average sale price/listing price ratio increased by 1.27% ( Average sale price/listing price ratio was 96.74%) 
  • Average days on the market before a property sold decreased by 9.8% ( 101 days) 
  • The proportion of distressed sales compared to total sales decreased by 7.1% (distressed sales made up 7.6% of total sales) 

Saturday, July 29, 2017

Tallahassee 2nd Quarter Real Estate Market Report

2nd Quarter 2017 Tallahassee Residential Real Estate Market Snapshot And Year Over Year Market Statistics.

Year over year home prices and sales continued to climb in the 2nd quarter of 2017.  Strong buyer demand stemming from an improving economy and a spike in consumer confidence has caused more people to jump off the fence and take the plunge to buying a home.  Home prices in the 2nd quarter of 2017 increased by a solid 6.4% compared to the same time a year ago bringing the average home price in Leon County up to $216,823.  The number of properties that sold went up by 3.9%  compared to the same time a year ago. 

 
On the supply side of the housing equation, the inventory of homes available for sale has continued to shrink. In the 2nd quarter of 2017 the number of properties available for sale went down by 7% compared to the same time a year ago. 

 
Low levels of housing inventory has been a problem in our real estate market for a couple years now and has continued to get worse.  This is making it difficult for home buyers to find the right home in a reasonable time frame. The increased demand for housing combined with the decrease in the number of properties listed for sale has been the main cause of increasing home prices.  While this makes it a tough market for buyers, it also makes it a great market for homeowners looking to sell their home. 

 
There are several factors contributing to the shortage of housing inventory.  The main factor is a lack of new construction of homes.  A shortage of lots available to build on and a shortage of construction labor along with expensive regulatory and permitting fees has made it difficult for builders to built new homes at the rate they need to in order to meet the growing demand for housing.  

 
Another factor leading the lack of inventory is that there are still some homeowners who are underwater on their mortgages from buying at the height of the market 10 years ago. This means they still owe more on their mortgage than their home is worth, so they are unable to sell their home without bringing money to closing. 

 
Also, there are a lot of homes that are owned by investors who bought homes during the recession as rental properties. These investors are hanging on to these homes instead of selling them, so this is also part of the reason for the lack of housing inventory.  These are homes that would normally be on the market for sale, but instead they are being rented out.  

 
In the 2nd quarter of 2017 homes in Leon County sold in 76 days on average which is 3 days shorter than it took homes to sell a year ago. With the increasing demand for homes and the decreased supply of homes for sale, this should be no surprise that homes are selling quicker than they did a year ago. 

Also, the sale price to listing price ratio, which compares how much a home sold for  compared to it's listing price, stayed about the same going down just 0.3% from the 2nd quarter last year.   In the 2nd quarter of this year, homes sold for 97.81% of listing price on average.  This high sale price to listing price ratio should also not be a surprise given the fact that demand for housing is far outpacing the supply of homes available for sale. 

 
Another market trend worth taking note of is that the proportion of distressed sales (foreclosures and short sales) compared to total sales continued to go down in the 2nd quarter of 2017 compared to the same time a year ago. Distressed sales only made up 3.98% of total sales in the 2nd quarter of 2017 which is down by 2.77% from a year ago when distressed sales made up 6.75% of total sales.  

 
Distressed sales typically sell at a discount compared to non distressed sales and they bring down the value of surrounding properties.  The fact that distressed sales are back to a historically normal level is a great thing for property values and our real estate market as a whole.  At the height of the foreclosure crisis when distressed sales made up 25%-30% of total sales, home prices were forced downward which pushed prices low and kept them from rising.  There are distressed sales out there now, but they are few and far between.  

 
To sum up the condition of the housing market in Leon County in the 2nd quarter, you could say that the demand for homes is very, very strong, but we need more homes for sale on the market.  There are more and more people entering the market to buy a home now as the economy improves and as a growing number of millennials are now getting to the point in their lives where they are ready to buy a home, but the supply of homes available is not adequate to meet the growing demand.  In the near future I would expect these conditions to persist. There are some large subdivisions planned to be built over the next few years here in Tallahassee which could provide the much needed supply of homes, but until those come into existence we are going to have a shortage of homes available  

 
The year over year market statistics for Leon County as a whole and by quadrant for the 2nd quarter of 2017 are listed below. 


Tallahassee as a whole

  • Listings decreased by 7% (1736 Properties listed for sale) 
  • Sales increased by 3.9% (1,307 properties sold) 
  • Average sale price increased by 6.4% (Average sale price $216,823)
  • Average Sale price/list price ratio decreased by 0.3% (97.81%)
  • Average days on the market to sell decreased by 3.8% (76 days on the market)
  • Proportion of distressed sales to total sales decreased by 2.77% (distressed sales made up 3.98% of total sales) 

 
Northeast Tallahassee

 

  • Listings decreased by 11.96% (883 properties listed for sale) 
  • Sales increased by 6.2% (684 properties sold)
  • Average price increased by 4.5% (Average price was $273,689)
  • Sale price/list price ratio decreased by 0.63% (average sale price/list ratio was 97.75%)
  • Average days on the market decreased by 1.4% (68 days on the market on average) 
  • The proportion of distressed sales to total sales decreased by 1.9% (distressed sales made up 2.6% of total sales) 

 
Northwest Tallahassee


  • Listings decreased by 4.66% (471 properties listed for sale) 
  • Sales decreased by 2.79% ( 348 properties sold) 
  • Average sale prices were virtually unchanged from last year with just a $50 average increase ( average sale price was just  $133,049) 
  • Average sale price/list price ratio increased by 0.51% (Average sale price/list price ratio was 97.79%)
  • Average days on the market before a home sold was unchanged from a year ago at 88 days. 
  • The proportion of distressed sales compared to total sales decreased by 3.5% (distressed sales made up 6% of total sales) 

Southeast Tallahassee

 

  • Listings increased by 6.2% (277 properties listed for sale)
  • Sales increased by 15.3% (211 properties sold) 
  • Average price increased by 11% (Average sale price was $205,904)
  • Average sale price/list price ratio decreased by 0.19% (sale price/list price ratio was 98.22%) 
  • Average days on the market before a home sold decreased by 18.7% (74 days) 
  • The proportion of distressed sales compared to total sales decreased by 1.4% (distressed sales made up 5.7% of total sales)  
Southwest Tallahassee
  • Listings increased by 5.4% (105 properties listed for sale) 
  • Sales decreased by 12.3% ( 64 properties sold) 
  • Average sales price increased by 21.3% (Average sale price was $100,588) 
  • Average sale price/listing price ratio increased by 1.44% ( Average sale price/listing price ratio was 96.93%) 
  • Average days on the market before a property sold increased by 19.8% ( 115 days) 
  • The proportion of distressed sales compared to total sales decreased by 9.36 % (distressed sales made up 1.6% of total sales) 

If you have any questions or comments, please contact Bobby Nahoom at (850) 567-0037 or at nahoom1171@yahoo.com

Monday, April 24, 2017

Tallahassee 1st Quarter 2017 Real Estate Market Report

Bobby's Real Estate Column   
1st Quarter 2017 Tallahassee Residential Real Estate Market Snapshot And Year Over Year Market Statistics.

Average year over year home prices continued to increase in the 1st quarter of 2017 compared to the first quarter of 2016.  Year over year home sales remained flat in the first quarter of this year, and the number of properties listed for sale dropped by close to 10% compared to the same time period in 2016. Also, on average in the first quarter of this year homes took less time to sell compared to the same time period in 2016.  The homes that did sell in the 1st quarter of this year ended up selling for a price closer to the listing price compared to a year ago.  Lastly, in the first quarter of this year  we saw a big drop in distressed sales (foreclosures and short sales)  in Leon County.  In the first quarter of this year, distressed sales only made up 6.3% of all sales. During the same time a year ago, distressed sales made up 10.8% of total sales, so in the last year distressed sales have almost been cut in half.  

 
First off, let's discuss number of listings for sale which is also known as the housing inventory.  For the past few years we have had a shortage of housing inventory available to meet the growing demand from home buyers.  This past year housing inventory in Leon County continued to decline.  Listings decreased 8.6% in the first quarter of this year compared to the same time period a year earlier. We are running about a 3 month supply of inventory which means that if no new houses were listed for sale, it would take 3 months for all of the homes on the market to sell. In a normal market we have about a 6 months supply of inventory. 

 
Lack of new construction is one of the main issues we are facing which is causing the shortage of housing inventory. Also, there are still a lot of people who owe more on their mortgages than their property is worth which means those people can't sell their homes. There may be relief coming  in terms of more housing inventory though! New construction this year is on the rise and new construction subdivisions are going up all around in Leon County, including the large subdivision on Walaunnee Way, which will provide buyers with more housing inventory in our listing starved real estate market. 

 
The next metric I would like to discuss is home sales.  Home sales in the first quarter of this year remained flat from the same time last year with less than a tenth of a percent year over year decrease in sales.  This is good because it means that strong home buyer demand is holding steady.  

 
Home prices continued to climb in the first quarter of 2017.  We saw a year over year increase in home values of 6.9% in Leon County in the first quarter of 2017. Homes have historically appreciated at a rate of about 3%-5% a year, so the 6.9% increase in home values that we saw in the first quarter of this year was a very strong showing.  Lack of inventory is probably one of the main drivers for the increasing prices.  I think once we see housing inventory go up to normal levels, I think we'll also see home price increases drop back down to around the 3% or 4% level of annual appreciation that is in line with historical norms.  

 
On average, homes in the first quarter of this year sold for 97.79% of what they were listed at for sale.  That is up 97.25% from the same time last year.  The fact that homes are selling for 97.79% of their asking price is an indicator that we are in a very strong sellers market.  

 
The amount of time that it took to sell a home in the first quarter of 2017 was shorter compared to the first quarter of 2016.  In the first quarter of 2017 homes sold on average after being on the market for just 91 days compared to 97 days in the first quarter of 2016.  

 
Finally, it looks like distressed sales (short sales and foreclosures)  have almost come down to pre-recession levels for the first time in about 10 years.   In the first quarter of 2017 distressed sales only made up 6.3% of total sales in Leon County compared 10.8% in the first quarter of 2016.   This is great news for homeowners because distressed sales generally sell below market value, and bring down the value of surrounding homes.  The low level of distressed sales is bad news for investors though since fewer distressed properties for sale means there are fewer deals on low priced homes to be had.  

 
Overall the real estate market is cruising along well in Leon County.  Prices are up and home sales are steady. It's a great time if you are wanting to sell your home.  Homes that are priced right for the market and that are in good condition are selling quickly.  This is especially true at this time of year when we are now in the full swing of the selling season.  The lack of inventory though is making it difficult for home buyers.  For home buyers looking for homes under $250,000, it's especially difficult.  

 
In the near future I would expect interest rates to stay fairly steady around 4%.  Interest rates have continued to come back down since their post election spike, and are back down under 4% for the first time since November.  Also, towards the end of the year I would expect to see more inventory hitting the market providing much needed relief to a housing market with very low housing inventory.  I don't think that additional inventory will get here by this selling season.  It might not be until next year that the affects of the relief of the additional supply of housing is felt.  With the economy getting better I would expect demand for housing to stay steady and maybe even get a little bit better.  If tax reform comes and we get our tax rates lowered, I would expect this to spur more home buying and also to fuel more home building since builders will have more money to invest in building new homes.  

 
A list of the year over year housing metrics for for the 1st quarter of this year in  Leon County as a whole and by quadrant are listed below for you to review. 

 

Tallahassee as a whole

 
  • Listings decreased by 8.6% (1,468 properties listed for sale) 
  • Sales decreased by 0.07% (869 properties sold)
  • Average sale price increased by 6.9%  (Average sale price was $192,701)
  • Average Sale price/list price ratio increased by 0.54% (Average sale price/list price ratio was 97.79%)
  • Average days on the market to sell decreased by 6.4% (Average home sold after 91 days on the market)
  • Proportion of distressed sales to total sales decreased by 4.5% (distressed sales accounted for only 6.3% of all sales). 

 
Northeast Tallahassee

 

  • Listings decreased by 9.2% (723 Properties listed for sale) 
  • Sales increased by 8.1% ( 424 properties sold) 
  • Average price increased by 5.6% ( Average sale price was $262,910)
  • Sale price/list price ratio increased by 0.59% (Average sale price/list price ratio is 98.21%) 
  • Average days on the market decreased by 8.9% (took a home 82 days on average to sell) 
  • The proportion of distressed sales to total sales decreased by 3.7% ( distressed sales made up 2.4% of total number of sales) 

 
Northwest Tallahassee

 
  • Listings decreased by 4.5% (442 properties listed for sale) 
  • Sales decreased by 11.6%  (236 properties sold) 
  • Average sale price increased by 13.1% (average sale price was $129,894) 
  • Average sale price/list price ratio increased by 1.63% (average sale price/list price ratio was 97.25%)
  • Average days on the market before a home sold increased by 6.7%. ( On average it took 112 days before a home sold) 
  • The proportion of distressed sales compared to total sales decreased by 8.3.% (distressed sales made up 8.9% of total sales) 

Southeast Tallahassee

 

  • Listings decreased by 10% (206 properties listed for sale) 
  • Sales decreased by 6% (140 properties sold)
  • Average prices decreased by 17% (average purchase price $139,485)
  • Average sale price/list price ratio increased by 0.58% ( average sale price/list price ratio was 97.85%) 
  • Average days on the market before a home sold decreased by 14.4% (Average home sold after 80 days on the market) 
  • The proportion of distressed sales compared to total sales increased by 1.4% (11.4% of all sales were distressed sales) 
Southwest Tallahassee
  • Listings decreased by 17.8% ( 97 properties listed for sale) 
  • Sales increased by 1.5% (number of properties sold 69) 
  • Average sales price increased by 13% (average purchase price was $84,065)
  • Average sale price/listing price ratio decreased by 1.82% (average sale price/list price ratio was 92.72%) 
  • Average days on the market before a property sold decreased by 9% (average home sold after being on the market for 101days) 
  • The proportion of distressed sales compared to total sales decreased by 3.1%. (distressed sales made up 11.6% of the total number of sales). 

Tuesday, January 10, 2017

Tallahassee 4th Quarter Real Estate Market Report

4th Quarter 2016 Tallahassee Residential Real Estate Market Snapshot And Year Over Year Market Statistics.

The real estate market in Leon County in the 4th quarter of 2016 was robust and saw strong gains across most metrics analyzed compared to the 4th quarter of 2015.  The number of properties sold was way up, the average sales price of a home was way up, the number of days on average it took to sell a home went down, homes sold closer to their asking prices compared to a year ago, and distressed sales (foreclosures and short sales) made up a smaller percentage of total overall sales.   The only problem we are still having in our local real estate market is that the number of homes being listed for sale has continued to decrease thus shrinking the amount of available housing inventory that buyers have to chose from. Let's look at and analyze each metric individually.  

 
Let's start out with housing inventory levels and the number of homes listed for sale.  The 4th quarter of 2016 saw a 13.1% decrease in homes listed for sale compared to the 4th quarter of 2015.  With an improving economy, housing demand has continued to increase.  More people have jobs, and incomes have finally started to rise a little over the last year, and because of this we need more homes on the market to meet the growing demand for homes. However, we are seeing the opposite with fewer homes on the market compared to last year. Expensive land costs and expensive regulations have curtailed new construction of homes. Also, fewer people are listing existing homes as well for whatever reason. It's possible that since 2016 was an election year that many put selling their homes on hold.  If that is the case then we should hope to see an increased level of housing inventory in 2017 to meet the growing demand for homes. Time will tell. 

 
Even though year to year listings were down in the 4th quarter of 2016, sales were up. We saw a 9.5% year over year increase in homes sales across Leon County in the 4th quarter of 2016.  An improving economy is most likely the reason more people are bought homes this past year.  

 
With the numbers of properties available for sale going down and the number of properties sold going up, year over year prices went up big time in the 4th quarter of 2016. In the 4th quarter of 2016, Leon County saw a whopping 17% increase in the average sale price with the average sales price jumping from $175,193 in the 4th quarter of 2015 to $204,980 in the 4th quarter of 2016.  

 
The sale price/listing price ratio increased by 0.53% in the 4th quarter of 2016 compared to the same time a year earlier. Homes actually sold for 97,33% of the homes listing price in the 4th quarter of 2016.  This high percentage is indicative of a it being a seller's market. 

 
The average number of days that it took for a home to sell in the 4th quarter of 2016 went down by 2.3% compared to the same time period a year ago.  In the 4th quarter of 2016 homes sold in 84 days on average. 

 
Finally, distressed sales (foreclosures and short sales) made up a smaller percentage of total sales in the 4th quarter of 2016 compared to the same time a year ago.  Distressed sales only made up 7.9% of all sales in Leon County in the 4th quarter of 2016 compared to 13.8% in the 4th quarter of 2015.   In a normal market, distressed sales have historically made up about 5% or less of total sales, so we are getting close to distressed sales getting back to their historically normal levels. 

O
verall the real estate market here in Leon County seems to be booming in terms of increased level of demand. Increasing number of sales, home prices, and a sale price/listing price ratio combined with decreased number of days on the market all point to strong gains in demand for homes.  We are still struggling on the supply side though with far fewer homes available to meet the growing demand. This means that in Leon County in 2017 it will be a real estate market best suited for selling a home, and it will be a tough market for people looking to buy a home. Don't mistake this for a boom similar to 2005-2007 though. Homeowners still need to price their homes according to what recent sales suggest their homes are worth and also sellers need to get their homes in tip top shape in order to get top dollar.  Home buyers these days have become very picky...probably due to HGTV. 

 
Increasing interest rates and home prices could curb demand for homes somewhat in 2017, but due to a continuously improving economy and a more business friendly White House, we will probably see housing demand continue to go up.   The question is will more homeowners begin to list their homes for sale. I think more homeowners will list their homes due to increasing prices which will help ease the housing shortage, but I don't think it will be enough to bring about an equilibrium in housing supply and housing demand. It will still be a sellers market in 2017. 

 
Below are the real estate market statistics for Leon County as a whole as well as for each quadrant of Leon County. 

 
Tallahassee as a whole

 
  • Listings decreased by 13.1% (978 properties listed for sale) 
  • Sales increased by 9.5% (891 properties sold)
  • Average sale price increased by 17%  (Average sale price was $204,980)
  • Average Sale price/list price ratio increased by 0.53% (Average sale price/list price ratio was 97.33%)
  • Average days on the market to sell decreased by 2.3% (Average home sold after 84 days on the market)
  • Proportion of distressed sales to total sales decreased by 5.9% (distressed sales accounted for only 7.9% of all sales). 

 
Northeast Tallahassee

 
  • Listings decreased by 15.2% (404 Properties listed for sale) 
  • Sales increased by 12.9% ( 428 properties sold) 
  • Average price increased by 16.7% ( Average sale price was $270,073)
  • Sale price/list price ratio increased by 0.9% (Average sale price/list price ratio is 97.45%) 
  • Average days on the market decreased by 9.6% (took a home 74 days on average to sell) 
  • The proportion of distressed sales to total sales decreased by 4.4% ( distressed sales made up 5.9% of total number of sales) 

 
Northwest Tallahassee

 
  • Listings decreased by 20% (282 properties listed for sale) 
  • Sales increased by 2% (251 properties sold) 
  • Average sale price increased by 7.4% (average sale price was $133,390) 
  • Average sale price/list price ratio increased by 1.2% (average sale price/list price ratio was 96.6%)
  • Average days on the market before a home sold increased by 4.7%. ( On average it took 89 days before a home sold) 
  • The proportion of distressed sales compared to total sales decreased by 9.1% (distressed sales made up 8.4% of total sales) 


Southeast Tallahassee

 
  • Listings decreased by 3.5% (167 properties listed for sale) 
  • Sales increased by 16.7% (140 properties sold)
  • Average prices increased by 17% (average purchase price $181,222)
  • Average sale price/list price ratio increased by 0.85% ( average sale price/list price ratio was 97.75%) 
  • Average days on the market before a home sold decreased by 10.2% (Average home sold after 88 days on the market) 
  • The proportion of distressed sales compared to total sales decreased by 4.4% (6.4% of all sales were distressed sales) 
Southwest Tallahassee
  • Listings increased by 2.5% ( 81 properties listed for sale) 
  • Sales increased by 15% (number of properties sold 69) 
  • Average sales price increased by 68% (average purchase price was $101,616)
  • Average sale price/listing price ratio increased by 2.6% (average sale price/list price ratio was 97.11%) 
  • Average days on the market before a property sold increased by 28% (average home sold after being on the market for 119 days) 
  • The proportion of distressed sales compared to total sales decreased by 2.1%. (distressed sales made up 24.6% of the total number of sales). 

If you have any questions or comments, please contact Bobby Nahoom at (850) 567-0037 or at nahoom1171@yahoo.com
 
 
 

 
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