Tuesday, January 24, 2012

Tallahassee Real Estate Market Statistics for 09/01/2011-12/31/2011

Today I will be giving you an update on the current condition of Tallahassee's real estate market. Once again I have taken the liberty of doing some research, and using the Tallahassee Board of Realtors MLS statistics, I have pulled and analyzed some very useful data that I will be using here today to give you an idea of how Tallahassee's residential real estate market is doing. In my research I made year to year comparisons covering and comparing the time periods of September 1st 2010 through December 31st 2010 to September 1st 2011 through December 31st 2011. To make my data as meaningful as possible, I divided properties by both price range and location. I divided the properties up into 5 different price ranges and 4 different areas of Leon County. In my research I looked up the number of homes listed for sale during those time periods, the number of homes sold in those time periods, the average sale price of the homes that sold in those time periods, the average number of days it took for a home to sell in those time periods, and the sale price to list price ratio (this is the average % of what a home sold for compared to what it was listed for sale at). I also looked at what I call the "distressed sales/total sales ratio" This ratio is the number of distressed sales (foreclosures and short sales) divided by the total number of sales. This figure is important because the higher this ratio is the more downward pressure on home prices there will be. Below is a summary of the data that I found categorized by price range and for Tallahassee as a whole.

Year Over Year Market Statistics for Tallahassee as a whole




  • 22.9% decrease in the number of properties listed for sale (1,057)

  • 2.1% increase in the number of properties sold (677)

  • 7.3% decrease in the average sale price ($166,652)

  • 36 day increase in the average amount of time it took to sell a home (148)

  • 0.68% decrease in the average sale price to list price ratio (94.37%

  • 4.7% increase in the distressed sales/total sales ratio (24.5%)
Summary of Tallahassee's Real Estate

Once again it appears that Tallahassee's real estate market improved in the last trimester of 2011 compared to the last trimester of 2010. We have seen a substantial decrease in the number of properties listed for sale, while at the same time we saw an increase in the total number of properties that sold. A decreasing number of properties listed for sale ( a decrease in the supply of residential properties) along with an increase in the number of properties sold (an increase in the demand for residential properties) is exactly what our local real estate market needs in order for home prices to begin to rise again. However, it appears that the supply of residential properties needs to decrease even further and the demand for residential properties needs to increase even further before we will begin to see prices of residential property in Tallahassee begin to rise again. I think the trend of decreasing housing inventory and increasing sales will continue on in Tallahassee in 2012, and I think that it will probably be 2013 before we begin to see the average sale price of homes in Tallahassee begin to rise again.


Another important factor to consider when you are trying to determine the condition of our local real estate market in Tallahassee and how soon it might recover is the amount of distressed property sales compared to total property sales, or as I like to call it, the distressed sales/total sales ratio. In the last trimester of 2011 the distressed sales/total sales ratio was 24.5% . That is a 4.7% increase from the same time period in 2010. This increase in the distressed sales/total sales ratio has played a large role in why home prices in Tallahassee have continued to go down. In order for home prices to go up again in Tallahassee, we are going to need to see the distressed sales/total sales ratio go down. This is because distressed property sales (which are mostly foreclosure sales and short sales) sell at a discounted price below market value. When these properties sell, they bring down the value of the surrounding properties thus depressing prices.


A decrease in the distressed sales/total sales ratio will most likely not happen in Tallahassee in 2012. Banks are still holding a large amount of shadow inventory ( homes that the banks own but have not yet put on the market for sale), and it is very likely that they will start releasing a lot of this shadow inventory onto the market this year at an even faster pace than last year. With that being said, it is most likely the number of distressed sales will increase which will continue to supress home prices in Tallahassee in 2012.


In the last trimester of 2011, we saw a small decrease in the average sale price to list price ratio compared to the same time period in 2010. This is a clear indication that our local real estate market has become just a little bit more of a buyer's market since a year earlier.


In the last four months of 2011 it took on average an extra 36 days to sell a home compared to the same time period a year earlier.


One important thing to note about Tallahassee's real estate market is that the market statistics do vary from area to area and/or from price range to price range. We saw the biggest drops in home prices and the biggest increases in the distressed sales/total sales ratio in the lower price ranges. When you get into the middle and upper price ranges, you actually see some areas where prices are increasing, and it appears that the market for homes in those price ranges, in certain areas of town, is getting better. The market for middle and upper price range properties seems like it is on the brink of entering a recovery stage in which prices are bottoming out and will begin increasing on a consistent basis.


The market for properties in the lower price ranges on the other hand has a longer way to go before we see prices begin to start going up again. The reason for this is that you had a lot of overbuilding in the lower price range during the boom years which lead to an over supply of properties. We still need to reduce the supply of these properties before prices can begin going up again. Second, since many of these properties were built and sold during boom years, a lot of these properties are underwater which in a lot of cases has lead to these properties being foreclosed on or sold as short sales. With a very high percentage of the sales in this price range being distressed sales, home prices have been and will continue to be suppressed.


One thing is for certain though, if you are in the market to purchase a residential property in Tallahassee, 2012 will be a great year to do so. Prices in Tallahassee are at levels that we have not seen since 2002, and interest rates on home loans are as low as they have ever been.


Year over year market statistics for the $0-$125,000 price range


Northeast Tallahassee



  • 23.2% decrease in the number of properties listed for sale (66)

  • 32.5% increase in the number of properties sold (53)

  • 13.1% decrease in the average sale price ($87,586)

  • 4.7% decrease in the average sale price to list price ratio (88.05%)

  • 50 day increase in the average number of days it took for a property to sell (159 days)

  • 5.8% increase in distressed sales/total sales ratio (28.3%)

Northwest Tallahassee



  • 28.7% decrease in the number of properties listed for sale (186)

  • 11.5% increase in the number of properties sold (126)

  • 7.7% decrease in the average sale price ($70,926)

  • 2.8% increase in the average sale price to list price ratio (89.18%)

  • 39 day increase in the average number of days it took for a property to sell (136 days)

  • 2.7% decrease in the distressed sales/total sales ratio (38.9%)

Southeast Tallahassee



  • 26.6% decrease in the number of properties listed for sale (94)

  • 28.2% increase in the number of properties sold (59)

  • 13.3% decrease in the average sale price ($67,918)

  • 6.97% decrease in the average sale price to list price ratio (88.72)

  • 107 day increase in the average number of days it took for a property to sell (198 days)

  • 21.1% increase in the distressed sales/total sales ratio (40.74%)

Southwest Tallahassee



  • 25.9% decrease in the number of properties listed for sale (60)

  • 11.6% decrease in the number of properties sold (38)

  • 8.7% decrease in the average sales price ($51,598)

  • 11.45% increase in the average sale price to list price ratio (93.28%)

  • 35 day increase in the average number of days it took to sell a property (163 days)

  • 23% increase distressed sales/total sales ratio (57.9%)

Summary of The $0-$125,000 price range


In the last trimester of 2011, we saw both a substantial decrease in the number of properties listed for sale and a substantial increase in the number of properties sold in this price range. The high distressed sales/total sales ratio in this price range is the main contributing factor causing the continuation of falling home prices in this price range. As stated before, distressed sales usually sell at a discount compared to non-distressed sales. When these distressed properties sell at a discount they bring down the values of surrounding properties.


The average sale price to list price ratio of homes that sold in this price range was lower in the last trimester of 2011 compared to the last trimester of 2011 which means that buyers who are shopping for properties in this price range have more negotiating power than they did last year. With many property sales coming from foreclosure sales and short sales, the decrease in the average sale price to list price ratio does not come as too much of a surprise. Banks have a huge stake in these foreclosure and short sale properties. The longer it takes to sell these properties, the more money the banks lose. Because of this, banks are starting to let properties go for values further below what the properties are listed for sale at just so the banks can get these properties off of their books. With foreclosures and short sales making up between 30%-40% of properties in this price range, it's no wonder why the average sale price to list price ratio has decreased.


The average number of days it takes to sell a property in this price range has increased from the same time period a year earlier. Again, a lot of this is most likely attributed to the the high number of short sale and foreclosure sales that are taking place in this price range. Distressed sales typically take longer to close on due to problems such as title issues, problems with the condition of the properties that are discovered in home inspections, and because of lengthly short sale processes.


The increase in the number of properties sold and the decrease in the number of properties listed for sale is a positive sign though. With the supply of homes on the market decreasing and the demand for homes increasing, it should only be a matter of time before prices bottom out and begin increasing again. How long will it take before we reach that point is still uncertain. It does appear that the rate at which prices are decreasing is slowing down, so that is a good sign that indicates that the worst is behind us.


Compared to the higher price ranges, this price range will most likely be the last price range of properties to see prices appreciate. This is because of the over supply of homes in this price range and because this price range has the highest distressed sales/total sales ratio


Year over year market statistics for the $125,001-$250,000 price range.


Northeast Tallahassee



  • 17.3% decrease in the number of properties listed for sale (268)

  • 11.6% increase in the number of properties sold (202)

  • 5.7% decrease in the average sales price ($181,229)

  • 0.18% decrease in the average sale price/list price ratio (96.33%)

  • 12 day increase in the average amount of time it took to sell a property (121 days)

  • 7.7% increase in the distressed sales/total sales ratio (18.2%)

Northwest Tallahassee



  • 33.6% decrease in the number of properties listed for sale (85)

  • 7.5% increase in the number of properties sold (49)

  • 2.4% increase in the average price of a home sold ($166,696)

  • 0.58% decrease in the average sale price/list price ratio (96.14%)

  • 82 day increase in the average number of days it took to sell a home (235 days)

  • 3% decrease in the distressed sales/total sales ratio (10.2% of total sales were distressed sales)

Southeast Tallahassee



  • 31.3% decrease in the number of properties listed for sale (55)

  • 40% decrease in the number of properties sold (30)

  • 0.9% decrease in the average sale price ($176,764)

  • 0.29% decrease in the average sale price to list price ratio (95.36%)

  • 81 day increase in the average number of days it took to sell a home (161 days)

  • 4.7% decrease in the distressed sales/total sales ratio (13.3% of total sales were distressed sales)

Southwest Tallahassee



  • 6.3% decrease in the number of properties listed for sale (15)

  • 125% increase in the number of properties sold (9)

  • 5.2% increase in the average sales price ($156,120)

  • 4.66% decrease in the average sale price to list price ratio (96.88%)

  • 42 day decrease in the average number of days it took to sell a property (105 days)

  • No change in distressed sales/total sales ratio ( there were no distressed sales in either year.)

Summary of the $125,001-$250,000 price range


In all areas of Tallahassee in this price range, we saw a decrease in the number of properties listed for sale and an increase in the number of properties sold. In the northwest and southwest parts of Tallahassee, the average sale price increased. In the northeast and southeast parts of town, we saw a decrease in the average sales price. In northeast Tallahassee we saw an increase in the distressed sales/total sales ratio. In all areas of Tallahassee we saw a slight decrease in the average sale price to list price ratio indicating that buyers have gained some negotiating power compared to last year. You could also take this to mean that the market for homes in this price range has shifted a little bit more towards being a buyer's market. Although it should be noted that this shift is a very small shift.


With the decrease in the number of properties listed for sale, an increase in the number of properties sold, an increase in the average sales prices of homes in half of Tallahassee, and a decrease in the distressed sales/total sales ratio, it appears that the market for homes in this price range is stabilizing. The key statistic to look at in this price range though is the distressed sales/total sales ratio. If this ratio continues to decline, than it would be safe to assume that the market for homes in this price range will continue to improve. However, if we see a surge of distressed properties hit the market, than homes in this price range could continue to lose value.



Year over year market statistics for the $250,001-$450,000 price range.


Northeast Tallahassee



  • 19% decrease in the number of properties listed for sale (128)

  • 29.3% decrease in the number of properties sold (65)

  • 1.1% increase in sales price ($326,304)

  • 0.33% increase in the average sale price to list price ratio (95.92%)

  • 2 day increase in the average amount of time it took to sell a home (125)

  • 2.5% decrease in distressed sales/total sales ratio (6.2%)

Northwest Tallahassee



  • 16,7% increase in the number of properties listed for sale (16)

  • 60% decrease in the number of properties sold (4)

  • 13.5 increase in the average sales price ($343,462)

  • 0.15% increase in the average sale price to list price ratio (93.40%)

  • 57 day decrease in the overall average time it took to sell a home (105)

  • There were no distressed sales in either 2010 or 2011

Southeast Tallahassee



  • 10% decrease in the number of properties listed for sale (27)

  • 53.8% increase in the number of properties sold (20)

  • The average sale price increased by $20 (so essentially there was no change in average sales price) ($321,729)

  • 0.15% increase in the in the average sale price to list price ratio (98.12%)

  • 10.4% decrease distressed sales/total sales ratio (5%)

Southwest Tallahassee



  • 33.3% decrease in the number of properties listed for sale (4)

  • 100% increase in the number of properties sold (1)

  • The one property that sold, sold for $260,000

  • The property that sold took 40 days to sell

  • No change in the number proportion of distressed sales compared to total sales.


Summary of the $250,001-$450,000 price range


For homes in this price range, the market statistics are a little bit more of a mixed bag when compared to the two price ranges below it. In all areas of Tallahassee except for Northwest Tallahassee, we saw a decrease in the number of properties listed for sale. In the northeast and northwest parts of Tallahassee, we saw a decrease in the number of properties that sold in this price range. In the southeast and southwest, we saw an increase in the number of properties sold. The best news about the market for homes in this price range is that prices are increasing overall. Also, the distressed sales/total sales ratio has decreased in this price range. Chances are that there is a correlation between between the decrease in the distressed sales/total sales ratio and the increase in sales prices of homes in this price range. The decrease in the distressed sales/total sales ratio has created an environment in this price range where home prices are able to start going up again.


Another sign that the market for homes in this price is improving is that the average sale price/list price ratio of homes in this price range increased. This means that the market for homes in this price range is shifting in the direction of a seller's market where sellers have gained more negotiating power from a year ago.


In the northeast and southeast parts of Tallahassee we have seen an increase in the average number of days it takes to sell a property. In northwest Tallahassee we saw a sharp decrease in the average number of days it took to sell a property.


Most of the market statistics for homes in this price range varied from one area of Tallahassee to the next. However, the statistics that are the same for in all areas of Tallahassee for homes in this price range is the average sales prices and the distressed sales/total sales ratio. In all areas of Tallahassee in this price range, it appears that prices are stabilizing or increasing. Also, in all areas of Tallahassee, the distressed sales/total sales ratio is decreasing. These two statistics alone show that the market for homes in this price range is improving.


Again, in this price range the key statistic to watch is the distressed sales/total sales ratio. If this ratio increases, than home prices could fall again. However, if this ratio continues to fall, it is likely that we will see sustained improvement in the market for homes in this price range.



Year over year market statistics for the $450,001-$750,000 price range


Northeast Tallahassee



  • 25% decrease in the number of properties listed for sale (30)

  • 21.4% decrease in the number of properties sold (11)

  • 1.8% increase in the average sales price ($572,500)

  • 0.69% increase in the average sale price to list price ratio (93.55%)

  • 28 day increase in the average time it took to sell a property (176 days)

  • 7.1% increase in distressed sales/total sales ratio. (27.3%)

Northwest Tallahassee



  • 50% decrease in the number of properties listed for sale. (1)

  • no change in number of properties sold. Only 1 property sold in each year.

  • In the last trimester of 2011 the property sold for $476,000 compared to $700,000 in the same time period in 2010

  • 85 day decrease in the number of days it took to sell a property in this price range (47 days)

  • 2.93% increase in the sale price/list price ratio (96.26%)

  • no change in the distressed sales/total sales ratio. (0%)

Southeast Tallahassee



  • 75% increase in the number of properties listed for sale (7)

  • 150% increase in the number of properties sold (5)

  • 16.6% decrease in the average sales price ($516,900)

  • 2.63% increase in the average sale price/list price ratio (98.76%)

  • 79 day increase in the average time it took to sell a property (112 days)

  • 33.3% increase in the distressed sale/total sales ratio. ( 33.3%)

Southwest Tallahassee



  • 200% decrease in the number of properties listed for sale (0)

  • No sales activity

Summary of the $450,001-$750,000 price range


In this price range, there was an overall decrease in the number of properties listed for sale. The only exception to this was in the southeast quadrant of Tallahassee, where we actually saw an increase in the number of properties listed for sale. The vast majority of sales in this price range occured in the northeast quadrant of Tallahassee. We saw a fairly sharp drop in the number of properties sold in northeast Tallahassee in this price range. The likely cause of this is that declining prices caused many properties to drop below the $450,000 mark and into the lower price range. In the southeast quadrant of Tallahassee, property sales increased, and in the northwest and southwest quadrant there was change in sales activity.


The average sales price increased in the northeast area of town. The northwest and southwest parts of town saw price declines. The overall sale price to list price ratio increased in all areas where there was sales activity. A likely cause of the increase in the sale price to list price ratio is the fact that there was a fewer number of homes for sale in this price range in 2011 compared to 2010. This means that buyers have a fewer number of properties to choose from which gives seller's more negotiating power thus driving up the sale price/list price ratio.


There was an overall increase distressed sales/total sales ratio. The northeast and southeast saw an increase in the average number of days it took to sell a property, while the northwest part of town saw a decline in the average number of days it took to sell a property.


The vast majority of sales in this price range took place on the northeast side of town. With the reduction of inventory, the increase in the average sale price, and the increase in the average sale price/list price ratio, it appears the market for homes in the price range on the northeast side of town is getting better. It appears that the market for homes in this price range in the southeast and northwest sides of town is getting worse though. This is probably because there is not as much demand for housing in this price range in those areas. There was no sales activity in the southwest part of town in this price range


Year over year market statistics for the $750,001+ price range


Northeast Tallahassee



  • 9% increase in the number of properties listed for sale (12)

  • 100% increase in the number of properties sold (2)

  • 31.7% increase in the average sales price ($1,100,000)

  • 19.57% decrease in the average sale price/list price ratio (75.86%)

  • 591 day increase in the average time it took to sell a house (917)

  • 50% decrease in the distressed sales/total sales ratio. (0%)

Northwest Tallahassee



  • 100% decrease in the number of properties listed for sale. (0)

  • No sales activity

Southeast Tallahassee



  • 300% increase in the number of properties listed for sale (3)

  • 100 % increase in the number of properties sold (1)

  • Sale price of sold property was $825,000

  • The property that sold sat on the market for 31 days before it sold

  • The property that sold was a distressed sale

Southwest Tallahassee



  • 100% decrease in the number of properties listed for sale (0)

  • No sales activity.


Summary of the $750,001+ price range


Sales activity was very limited in this price range. There were only 3 properties total that sold in this price range in all of Leon County in the last 4 months of 2011. Two of these sales occured on the northeast side of town, and one of these sales occured on the southeast side of town.


Although sales and listing activity was low for homes in this price range, we did see an increase in both the number of properties sold and properties listed for sale from a year earlier. The distressed sales/total sales ratio stayed about the same. The average sales price increased in this price range, and the number of days it took on average to sell a home in this price range increased.


With such limited activity in this price range, it is hard to make any assumptions about the overall market for homes in this price range.




2 comments:

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