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.
Overall 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).
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