3rd quarter 2014 Tallahassee Residential Real Estate Market Snapshot And Year Over Year Market Statistics.
After experiencing a setback in the second quarter of 2014, Tallahassee's residential real estate market is back on the rise again in the 3rd quarter of 2014. Average sales prices are up, the number of properties that sold went up, the number of days on average it took a property to sell went down and the average price a home sold for compared to what it was listed for, went up. The number of listings on the market did go down a little bit, and also the proportion of distressed sales compared to total sales did go up some. Overall though Tallahassee's real estate market did very well in the 3rd quarter of 2014.
As mentioned above the number of properties did go down slightly (only by one half of one percent). So even though the number of properties listed for sale went down, it was not enough of a drop to have a significant impact on the market. It's safe to say that the supply of homes on the market stayed pretty much stable in the 3rd quarter of 2014.
While the supply of residential properties on the market stayed the same, it seems that the demand for residential properties in Tallahassee went up in the 3rd quarter of 2014 compared to the same time a year before. Year over year, the number of properties sold went up by a little bit over 3% in the 3rd quarter of 2014.
If the laws of economics hold true then with the supply of residential properties holding steady and the demand for residential properties going up, prices must have gone up...which they did. In the 3rd quarter of 2014, the average sale price of residential properties in Tallahassee ticked up by about 3.4%. This is good news especially after experiencing a year over year price drop in the 2nd quarter of 2014.
The average number of days it took to sell a residential property in the 3rd quarter of 2014 remained unchanged from the same time a year before at 98 days. At the same time, the average sale price/listing price ratio went up. The average sale price/listing price ratio is what the average property sold for compared to what it's listed for sale at. In the 3rd quarter of 2014 the average property sold for 96.98% of what it was listed for which is just slightly higher than 96.55% which is what it was in the 3rd quarter of 2013.
The last metric I analyzed was the proportion of distressed sales (short sales and foreclosures) compared to total sales. In other words, out of all of the sales of residential properties what percentage of those are distressed sales. In the 3rd quarter of 2014, distressed sales made up 15.1% of total sales which is up slightly from 13.9% in the 3rd quarter of 2013.
In looking at all of the metrics, it's interesting that distressed sales went up. The reason I say that is because usually when distressed sales go up the average sale price will go down. The reason for this is that distressed sales sell at a discount compared to regular sales and typically bring down the values of surrounding properties. It is good news that prices went up even though the proportion of distressed sales went up. This means that the demand for properties in Tallahassee was strong enough so that the increase in distressed sales did not bring down values.
Tallahassee's real estate market seems to be stabilizing, and values are increasing at a rate that is on par with what values have historically increased by which is between 3%-5% a year. It seems that the supply and demand of homes has pretty well leveled out, and the fluctuations that we are seeing from quarter to quarter seem to be normal fluctuations caused by normal market forces such as interest rates and the job market. I think as long as the economy as a whole remains stable, then so will Tallahassee's real estate market.
I think the main thing that could have an impact on our real estate market more than any other single item is what happens with interest rates. The Federal Reserve has said that we can expect them to increase interest rates by Summer of 2015. If the economy improves quicker than expected then they might increase the interest rates sooner than that even. If interest rates go up, this will decrease most people's buying power since most people obtain mortgages to purchase real estate. This decrease in buying power could have a negative impact on home values. How large of an impact this will have depends on how much interest goes up, and also depends on what happens with the job market. If the job market continues to improve and demand for homes continues to go up, then the increase in interest rates might not have as much of an affect on the real estate market. Time will tell.
See below to see a snap shot of the quarterly statistics I looked at for Tallahassee's real estate market.
- The number of properties listed for sale decreased by 0.5% (1,344 properties were listed for sale)
- The number of properties that sold increased by 3.1% (927 properties sold)
- The average sale price went up by 3.4% (average sale price was $191,764)
- The average number of days it took to sell a property on average remained unchanged at 98 days.
- The average sale price/listing price ratio increased by 0.43% up to 96.98%.
- Distressed sales made up 15.1% of total sales which is up from 13.9% the year before.