Bobby's Real Estate Column |
Tallahassee Real Estate Market Update for the Month of April: How our local real estate has been affected the the Covid-19 Pandemic and what we can expect in the months to come. |
Hey everyone, hope you all are doing well! Just wanted to give you all an update on how our local real estate market fared here in Tallahassee during April. The first three months of the year, we were largely unaffected by the Covid-19 Pandemic, but in April we have finally begun to feel some of the effects, so today I just want to report to you the market data for April so you can know how things are turning out and what we can expect in the months to come.
As I predicted would happen in my last video, overall activity was down this April compared to April of 2019, but home prices were still up and holding strong. Even though activity dropped, it appears that the dropping levels of housing inventory have kept prices up and steered our real estate market into even more of a seller's market than before the pandemic began.
In April, we saw a sharp year over year drop in both the number of properties listed for sale and also in the number of properties sold, but we also saw a sharp increase in average home prices. Also the average sale price to list price ratio went up in April of this year compared to April of 2019, and the average number of days on the market that it took for a home to decreased this past April compared to April of 2019.
Another metric I looked at that I don't usually talk about is the sales absorption rate. This is the percentage of homes that were on the market that sold. It's a good indicator of how strong the real estate market is. This past April, the sales absorption rate also saw a sharp increase compared to April of 2019.
Let's start off by talking about the number of listings on the market. So this past April, we saw the number of new listings on the market drop by 21% compared to April of 2019. Going into the pandemic we already had a shortage of listing inventory, but now we REALLY have a shortage of homes for sale. Last year in April 2019 we had 680 homes listed for sale in Leon County whereas this past April we only had 464 homes listed for sale. The reason for this is that sellers are nervous that there are not enough buyers looking for homes right now and they would not get the price they wanted for their home because of that. For that reason we have far fewer homes on the market this year compared to last year.
Home sales also tumbled by 21% this past April compared to April of 2019. This year in April we saw only 345 home sales in Leon County compared to 437 homes that sold a year ago in April. The decrease in the number of sales is probably caused by a couple things. First is that many would-be homebuyers are not going out and looking at homes due to fear of going into people's homes and being exposed to the virus. The second reason there is less buyer activity is because many people have lost their jobs or are nervous about buying a property because they think it's not a good time due to the pandemic.
The average number of days to sell a home this past April was only 51 days which is down from 56 days in April of 2019. The average sale price/list price ratio was up by about 1% compared to a year ago with the average home this past April selling for 99.13% of a homes listing price.
Finally, the sales absorption rate this past April was up by over 10% compared to April of 2019. In April of this year, 74.35% of the homes listed for sale ended up selling whereas a year ago in April only 64.26% of homes ended up selling.
The bottom line is that even though overall activity has slowed down some, now is a fantastic time to sell your home if you are wanting to sell your home. If you were nervous that now is a bad time to sell, you have no reason to be nervous. All of the metrics above support the fact that now is a great time to sell. Home prices are up big compared to a year ago, homes are selling faster than a year ago, homes are selling for closer to their asking price than a year ago, overall a higher percentage of homes listed for sale sold in April, and most importantly, your home will have far fewer homes to compete against now than compared to a year ago.
Overall the future is looking optimistic. In the next 2-3 coming months I would expect to see home buyer activity ramp back up as Florida and the rest of the country open back up for business. In the past week or so since phase 1 of the re-openings have begun here in Florida, we have already seen an increase in the number of showings and new contracts, so we are already seeing signs of this in the first week of May. Also, interest rates are super low right now, so I think buyers will scramble to take advantage of that once consumer confidence picks back up, causing home sales to pick back up to normal levels in the near future.
The year over year metrics for Leon County are below for you to review. Feel free to contact me anytime with any real estate questions or concerns!
Leon County Year Over Year Metrics for April 2020:
- Number of Properties listed for sale Decreased by 21% (464 properties listed for sale.
- Number of properties sold decreased by 21%. (345 properties sold)
- Average sale price increased by 11% (Average sale price was $246,084.
- Average Sale Price/Listing Price ratio increased by 1.02%
- Average days on the market went down by 10.5%.
- The sales absorption rate went up by 10.09% (74.35% of number of homes listed for sale sold).
