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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Tuesday, October 4, 2016

Tallahassee 3rd Quarter Real Estate Market Report

3rd Quarter 2016 Tallahassee Residential Real Estate Market Snapshot And Year Over Year Market Statistics.

If I could sum up the Tallahassee Real Estate Market in a nutshell this 3rd quarter, I would say it gravitated to even more of a seller's market. Compared to the same time a year ago,  the main market trends we saw this 3rd quarter was fewer homes listed for sale, the number of homes sold stayed about the same, and home prices went up.  Distressed sales (foreclosures and short sales) continued to decrease as a percentage of total sales. Homes sold quicker in the 3rd quarter compared to the same time a year ago, and homes sold for an amount closer to the listing price than compared to the same time a year ago. 

The steady demand from home buyers and the decreased inventory have made it a great market if you are selling your home, but for home buyers it has been quite a frustrating market. Well priced homes in decent locations  that show well have been flying off the market making it tough for buyers to find the right home.   

First off let's talk about number of homes listed for sale.  As I stated above, there seems to be a housing inventory issue.  Compared to the same time last year, the number of properties listed for sale decreased by 9.3%.  This has caused a shortage of homes to meet the steady demand for homes. 

Housing demand in the 3rd quarter of this year remained about the same compared to the same time a year ago. The number of properties sold in the 3rd quarter of this year only decreased by less than 1% compared to the same time last year.  This is certainly good, and it's an indication that the job market is getting better or at least holding steady.  

With housing demand staying steady and the inventory of homes decreasing from last year, home prices were pushed up in the 3rd quarter of this year compared to the same time a year ago.  Year over year,  home prices were up 3.9% in the 3rd quarter of this year. This increase is a healthy and sustainable level of price appreciation that falls within the historical level of 3%-5% annual increase in home prices. 

Homes also sold faster in the 3rd quarter of 2016 compared to the 3rd quarter of 2015.  Average days on the market in the 3rd quarter of this year decreased by 2.3% compared to last year with the average home selling after being on the market for 82 days. 

The sale price/list price ratio, which shows how much a home sells for compared to what is was listed for sale at, went up in the 3rd quarter of 2016 compared to the same time a year prior. On average, homes in Leon County sold for 97.9% of the listing price in the 3rd quarter of 2016. Such a high sale price/listing price ratio is another strong indicator that we are in a seller's market. 

Last but not least, we saw another year over year decrease of distressed sales ( short sales and foreclosures).  Distressed sales only made up 8.2% of total sales in the 3rd quarter of this year compared to 10% in the 3rd quarter of 2015. Distressed sales typically sell at a discount compared to non-distressed sales, and they typically bring down the values of surrounding properties.  Distressed sales in a normal housing market make up around 5% of total sales, so we still have a little bit of room to go before distressed sales are back to normal levels, but with distressed sales only accounting for 8.2% of total home sales, we are much closer to the historically normal level of 5% then compared to the 25%-30% level we were at during the depth of the recession. 

Overall the real estate market is doing well in Tallahassee.  It seems the job market is getting better or at least holding steady which is causing a healthy demand for housing. There is no problem with housing demand, but with the supply of housing. The main problem with our real estate market right now is that we have such a shortage of inventory to meet the growing demand in an improving economy.  The reason for the shortage of homes I think is a problem within itself  that won't be an easy fix.  

High land costs in Tallahassee and expensive building regulations in Leon County (and around the state and country for that matter) have made new construction very expensive. Most new construction is geared towards bigger homes where builders can make more of a profit.  Builders can't build starter homes and make money, so this has caused an inventory shortage among starter homes. New construction levels are far below normal historical levels, and this is causing an inventory shortage.  I believe this will be a tough fix, and  there will be inventory shortage for quite some time. 

This will create opportunities for some though, including people looking to buy older homes in need of work to fix and flip them for a profit to end users.  More home buyers may also need to take advantage of renovation loans where one can tie in the costs of needed repairs to his/her loan. This is a good option for first time buyers who don't have a lot of cash to make needed repairs, and could provide a way for a young first time home buyer to get into a house for a good price in this inventory constrained market.  

In the near future I would expect to see the market stay fairly stable.  The fact that this is an election year may be partly to blame for the inventory shortage as many homeowners may be nervous about the outcome of the election and may be postponing the sale of their home until after the election.  We won't know if this is the case until after the election though. Either way,   I think the inventory shortage will be a problem for at least the next couple years until new construction prices go down. 

A summary of the 3rd quarter year over year residential real estate market statistics for Leon County is below.



Tallahassee as a whole

 
  • Listings decreased by 9.3% (1,379 properties listed for sale) 
  • Sales decreased by less than 1% (1,116 properties sold) 
  • Average sale price increased by 3.9% (Average sale price was $196,849)
  • Average Sale price/list price ratio increased by 1% (Average sale price/list price ratio was 97.9%)
  • Average days on the market to sell decreased by 2.3% (Average home sold after 82 days on the market) 
  • Proportion of distressed sales to total sales decreased by 1.8% (distressed sales accounted for only 8,2% of all sales). 

 
Northeast Tallahassee

 
  • Listings decreased by 2.2% (707 properties listed for sale) 
  • Sales decreased by 3.6% ( 562 properties sold) 
  • Average price increased by 3.1% ( Average sale price was $258,553)
  • Sale price/list price ratio increased by 1.11% (Average sale price/list price ratio is 98%) 
  • Average days on the market decreased by 2.7% (took a home 73 days on average to sell) 
  • The proportion of distressed sales to total sales decreased by 1.5% ( distressed sales made up 5.2% of total number of sales) 

 
Northwest Tallahassee

  • Listings decreased by 15.3% (382 properties listed for sale) 
  • Sales increased by 7.2% (327 properties sold) 
  • Average sale price increased by 2.1% (average sale price was $121,029) 
  • Average sale price/list price ratio increased by 0.57% (average sale price/list price ratio was 97.41%)
  • Average days on the market before a home sold increased by 8%. ( On average it took 94 days before a home sold) 
  • The proportion of distressed sales compared to total sales decreased by 1.7% (distressed sales made up 9.8% of total sales) 


Southeast Tallahassee

 
  • Listings decreased by 14.8% (202 properties listed for sale) 
  • Sales increased by 5.1% (165 properties sold)
  • Average prices increased by 18.2% (average purchase price $181,162)
  • Average sale price/list price ratio increased by 1.05% ( average sale price/list price ratio was 98.39%) 
  • Average days on the market before a home sold increased by 1.3% (Average home sold after 77 days on the market) 
  • The proportion of distressed sales compared to total sales decreased by 0.1% (13.3% of all sales were distressed sales) 
Southwest Tallahassee
  • Listings decreased by 20% ( 88 properties listed for sale) 
  • Sales decreased by 16.2% (number of properties sold 62) 
  • Average sales price increased by 9.2% (average purchase price was $79,170)
  • Average sale price/listing price ratio decreased by 0.33% (average sale price/list price ratio was 96.10%) 
  • Average days on the market before a property sold decreased by 28.8% (average home sold after being on the market for 116 days) 
  • The proportion of distressed sales compared to total sales decreased by 8.7%. (distressed sales made up 12.9% of the total number of sales). 


If you have any questions or comments, please contact Bobby Nahoom at (850) 567-0037 or atnahoom1171@yahoo.com





Friday, April 22, 2016

1st quarter 2016 Tallahassee Residential Real Estate Market Snapshot

1st Quarter 2016 Tallahassee Residential Real Estate Market Snapshot And Year Over Year Market Statistics.

The residential real estate market here in Tallahassee started off the year in the 1st quarter of 2016 with robust activity. We saw gains in both the number of properties listed for sale and in the number of properties sold.  The year over year increase in the number of properties sold was substantially higher than the number of new properties listed for sale though. This shows that the demand for homes is outpacing the new supply of homes becoming available for sale. With demand exceeding supply you would think that prices would be going up, but strangely enough the year over year prices decreased in Leon County in the 1st quarter of 2016.  This is actually the second quarter in a row that we have seen decreasing year over year home prices in Leon County which seems to suggest that our market is experiencing a price correction resulting in the huge price increases we saw in early 2015 when year over year prices increased by nearly 20%. 

In the first quarter of this year we also saw a year over year decrease in the average time it took to sell a home.  Homes also sold for a little bit closer to their listing prices in the 1st quarter of 2016 compared to the 1st quarter of 2015.  Finally, distressed sales made of a much smaller percentage of total sales in the 1st quarter of 2016 compared to the same time period a year earlier. 

Lets start off by talking about the year over year increase in properties listed for sale and increase in properties sold.  We saw a good sized year over year increase in the number of properties listed for sale in the 1st quarter of this year.  To be exact, the number of properties listed for sale in the 1st quarter of this year increased by 5.7% compared to the same time a year prior.  This is a good indication that homeowners are feeling more confident that now is a good time to sell their properties.  

While the number of properties listed for sale increased, the number of properties that actually sold in the first quarter of 2016 saw even bigger increases compared to the 1st quarter of 2015.  Year over year sales in the 1st quarter of 2016 increased by a whopping 14%.   What this means is that the increase in  demand for homes is outpacing the new supply of homes available for sale.  This increase in the sales of properties over the number of new properties being listed for sale has created a very competitive marketplace for home buyers this Spring.  Home buyers don't have a large inventory of homes to choose from, and often times homes that come up for sale that are priced right end up flying off the market before most interested home buyers even have a chance to place an offer on the property. With the increase in the demand for homes outpacing the new supply of homes, you would think that home prices would be rising, but that is not the case. 

Year over year home prices in the 1st quarter of 2016 actually decreased by 4% compared to the 1st quarter of 2015.   On the surface it might seem a little bit strange for home prices to go down when demand for homes is far out pacing the supply of homes. However, when we look at the situation more closely I think the reason why home prices have gone down is fairly simple. 

In the 1st half of 2015 we saw double digit year over year price increases that reached nearly 20%.  That is a huge increase in home prices in a very short period of time. That level of price appreciation is not sustainable, and I think our local real estate market is going through a price correction right now in response to the sharp price increases from a year ago. 

When we look at the situation even more closely, I think there is another reason that we are seeing prices decrease.  Over the past several years now, home prices have been on the rise. While home prices have been rising, people's incomes have not been rising. People's incomes over the past few years have been stagnant for the most part with only extremely small increases in some years.  Overall though, home prices have been exceeding incomes by leaps and bounds.   I think we are at the point now where people's incomes are limiting how much people can pay for homes, and until people's incomes start to go up then home prices will overall stay flat and not increase.  So to sum it up, I think that year over year prices went down in the 1st quarter because of a market price correction and because people's incomes are not going up. 

The average number of days that it took to sell a home in the 1st quarter of 2016 decreased by 6.7% going from 104 in the 1st quarter of 2015 to 97 days in the 1st quarter of this year.  The average sale price/listing price ratio, which measures how closely a home ends up selling for compared to what it's listing price is, slightly increased going up to 97.19% from 97.09% in the 1st quarter of 2015. So this means that the average home in Leon County in the 1st quarter of 2016 sold for 97.19% of what it was listed for sale at.  This indicates that we are in a strong sellers market here in Leon County. 

Finally, we continued to see distressed sales (foreclosures and short sales) making up a smaller percentage of total sales in the 1st quarter of 2016.  In the 1st quarter of 2016 distressed sales made up only 10.9% of all residential property sales. This is a big drop down from 17.9% in the first quarter of 2015.  Distressed sales typically sell at a discount bringing down the values of surrounding properties. Everything else being equal,  the fewer distressed sales we have, the higher home values should be.  

Overall I think that the residential real estate market is Leon County is doing very good. The market is hot, and both listing and selling activity picked up a good bit in the first quarter of 2016 compared to the 1st quarter of 2015. Prices saw a small decrease in the 1st quarter of this year compared to the same time a year earlier, but I don't think this is a bad thing.  Prices have been increasing so much over the last few years while incomes have not. If the home prices keep going up at a pace that exceeds income levels then we will eventually have a housing affordability crisis on our hands. I think the small price decreases are a good thing, and will serve to help  keep housing affordable for home buyers.   

Distressed sales have continued to go down and have reached a level of about 10% of total sales.  This is still above the historical level of about 5% though, so hopefully we'll see distressed sales continue to decrease down towards that 5% mark as the banks continue to sell off their inventory of distressed properties. Of course the lower level of distressed sales will be good for property values, but it also means fewer opportunities for investors to pick up investment properties at steep discounts. 

Looking ahead, what are some things we need to pay attention to that could drive the direction of our real estate market? Locally, I would say to look out at how new developments across Tallahassee could have an impact on property values and rents in certain areas. The new VA hospital on the corner of Blairstone and Orange Avenue is close to being finished, and will most likely bring new demand for both rental properties as well as new home buyer demand to that area. There will be people coming into town for new jobs there, and also there will most likely be veterans that move to Tallahassee to live close to the new VA hospital. Purchasing real estate in this area right now might be a smart move. 

Another development is the opening of the new Centre of Tallahassee on the corner of John Knox Road and North Monroe Street.  This place will bring new jobs to the area and people will want to live close to this development. It will include a big concert venue, shopping, dining and movie theaters. Purchasing real estate close by to this development might not be a bad idea either as demand for housing nearby is likely to go up. 

Broadly speaking I think I would keep my eye on interest rates and people's wages. If interest rates go up then it could have a negative affect on home sales. The Federal Reserve is likely to increase the Federal Funds Rate again which could cause interest rates to rise.  It could also cause stock prices to drop which could in turn make people more hesitant to purchase homes. With wages, I would pay attention to see if wages start to creep up substantially.  If they don't then I would expect  home prices to remain flat  for the foreseeable future.  



A summary of the 1st quarter year over year residential real estate market statistics for Leon County is below.

 
Tallahassee as a whole

 
  • Listings increased by 5.7% (1,532 properties listed) 
  • Sales increased by 14% (871 properties sold) 
  • Average sale price decreased by 4%(Average sale price was $179,431)
  • Average Sale price/list price ratio increased by 0.1% (average sale price to list price ratio was 97.19%)
  • Average days on the market to sell decreased by 6.7%. (Average days on the market was 97 days) 
  • Proportion of distressed sales to total sales decreased by 7% (distressed sales made up 10.9% of total sales) 

 
Northeast Tallahassee

 

  • Listings decreased by 1% (759 properties listed for sale)
  • Sales increased by 3% ( 390 properties sold) 
  • Average price decreased by 2.2% (Average sale price was $248,484)
  • Sale price/list price ratio increased by 0.24% (sale price to listing price ratio was 97.62%) 
  • Average days on the market decreased by 9% ( average days on the market was 90 days)
  • The proportion of distressed sales to total sales decreased by 4.1%. (distressed sales made up 6.2% of all sales) 

 
Northwest Tallahassee


  • Listings increased by 9.6%. (446 properties listed for sale)
  • Sales increased by 16.2% (266 properties sold) 
  • Average sale price decreased by 2.1%  (Average sale price was $112,699) 
  • Average sale price/list price ratio decreased by 0.35% (average sale price/listing price ratio was 95.59%)
  • Average days on the market before a home sold increased by 10.5% ( the average home sold in 105 days) 
  • The proportion of distressed sales compared to total sales decreased by 7.2% (distressed sales made up 17.3% of all sales) 
Southeast Tallahassee

 

  • Listings increased by 6.5% (212 total properties listed  for sale 
  • Sales increased by 51.5% (147 properties sold) 
  • Average prices decreased by 2.9% (average sales price was $165,560)
  • Average sale price/list price ratio increased by 0.39% ( average sale price/listing price ratio was 98.08%) 
  • Average days on the market before a home sold decreased by 16.1% (home sold on average after 94 days on the market)
  • The proportion of distressed sales compared to total sales decreased by 10.4% (distressed sales made up 10.2% of all sales)
Southwest Tallahassee
  • Listings increased by 49.4%  (115 properties listed for sale) 
  • Sales increased by 13.3% (68 properties sold)
  • Average sales price increased by 14.3% ($74,417) 
  • Average sale price/listing price ratio increased by 0.78% (Average sale price/listing price ratio was 94.54%)  
  • Average days on the market before a property sold decreased by 26.5% (It took 111 days on average for a home to sell)
  • The proportion of distressed sales compared to total sales decreased by 20.3% (distressed sales made up 14.7% of total sales)