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)