April Tallahassee Real Estate Market Update:

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). 

1st Quarter 2020 Tallahassee Residential Real Estate Market Snapshot And Year Over Year Market Statistics.

Despite the current pandemic of Covid-19 that is causing all kinds of disruption in our everyday lives and in the broader economy, our local real estate market had a very strong start to the year in the 1st quarter here in Leon County.  On average, our local real estate market saw year over year improvements in the first quarter of this year  for every metric that I  measured!    

On average throughout Leon County, the number of listings increased (which we badly need with our shortage of available homes for sale), we saw an increase in the number of homes that sold,  and we saw a big jump in average home prices.  The average sale price/listing price ratio went up.  The average sale price/listing price ratio measures how much a home sells for compared to the home's asking price.  The average number of days it took a home to sell went down.  Lastly, there were fewer distressed sales (foreclosures and short sales) relative to the total number of homes sold in the 1st quarter of this year compared to the same time period a year prior.   

There was some variation in the different quadrants of the county for the average number of days on the market, the sale price/listing price ratio and with change in the level of distressed sales.  However,  the number of listings, the number of homes sold and average prices all saw an improvement across the board in all 4 quadrants of the county.  This is quite impressive.  

Let's start off by talking more about the improvement we saw in the number of listings here in the 1st quarter of this year.  Compared to the first quarter of 2019,  the number of properties listed for sale went up by 2.6% in the first quarter. of this year.  It's not a big increase, but with our shortage of properties available for sale, any increase in listings is great news at this time! The increase in the number of listings is likely due to a combination of an increase in new construction homes for sale and also more homeowners deciding to sell their home to take advantage of  today's high home prices.

In addition to a higher number of listings, we also saw a healthy increase in the number of homes that sold in the 1st quarter of this year compared to the 1st quarter of 2019.  Year over year, we saw a 5.7% increase in the number of homes that sold.  This increase in home sales was fueled by a strong job market and low interest rates.  Whether or not this trend will continue for the remainder of the year is a big question for most people.  It's hard to say right now with what's going on with Covid-19 and the partial economic shut down.  Hopefully we'll be okay and it won't have too much of an impact!  Time will tell. 

Home prices in Leon County saw a huge jump in the 1st quarter of this year compared to the 1st quarter of 2019.  To be exact, we saw a year over year increase of 10.2% in the 1st quarter of this year.  That is huge!  The historical average rate of increase for home prices is between 3%-5% a year, and the increase we saw in Leon County in the 1st quarter is more than double that.   The increase in home prices was caused by a strong job market fueling buyer demand and low level of housing inventory.  It's basis economics, folks!  High demand coupled with low supply equals an increase in prices!! It's a tough market if you are buying a home, but a great market if you are selling.  

Even with all that's going on with the Covid-19 Pandemic, it's my opinion that home prices will stay strong this year.  I think that the inventory of homes is so low that even at a lower level of demand from home buyers, prices will stay steady.  I think that home prices will not increase as fast, but I do not think home prices will go down this year.   

The next metric that also saw a year over year improvement was the average sale price/listing price ratio.  Again, the average sale price/listing price ratio measures how much a home sells for compared to what the asking price of the home is.  In the first quarter of 2020, the average sale price to list price increased by 0.97% from the first quarter of 2019 jumping up to 98.41%.  This means that on average, in the first quarter of 2020, homes sold for 98.41% of the home's asking price.  This is indicative of the fact that the 1st quarter of 2020 was a seller's market here in Tallahassee.  The combination of high demand and low housing supply forced home buyers to pay very close to seller's asking prices with very little room to negotiate.  

Another improvement we saw in our local housing market in the 1st quarter of this year, was that it took less time on average for homes to sell compared to the 1st quarter of 2019.  In fact, we saw a year over year decrease of 21% in the amount of time in took a home to sell in the first quarter of this year, dropping from 76 days a year ago to only 60 days in the first 3 months of this year.   Again, properties selling faster in the 1st quarter of this year was likely a result of the increased demand for homes that we saw coupled with a low supply of homes for sale. 

Finally, distressed sales (foreclosures and short sales) made up a smaller amount of total sales in the first quarter of this year compared to the first quarter of 2019.  In the first quarter of this year, distressed sales only made up 2.04% of total sales.  This is down from 2.16% in the first quarter of 2019.  Nowadays distressed sales are pretty much a non-event with the level being so low, but it's good to keep an eye on them because if the level of distressed sales starts going up, that could be a sign of a change coming in the market.  So far  this year though, it looks like levels of distressed sales are remaining very low. 

Overall Tallahassee's residential real estate market had a very strong start to the year in 2020.  Throughout the county, every metric I measured saw year over year improvements.  Even though the year started out strong, a lot of people are wondering how the real estate market will play out for the remainder of the year.  No one knows for certain at this point, but I think we can make a fairly educated guess of what to expect based on the information we have now.  

First and foremost, I think that overall activity will probably slow down in the 2nd quarter of this year and possibly may stay slower than normal even into the 3rd quarter.  Slower activity will be in the form of fewer home sales and a fewer number of people listing their homes for sale.  How much of a slow down we will see is hard to tell at this point.  It depends on a lot of things that we really have no or very little control over at this point.  

Despite the slow down in activity, I don't think we will see any negative impact on home prices this year.  I think it's very possible that home prices will not increase as much as they were going to increase had the Covid-19 Pandemic not hit, but home prices will not decrease.  How do I know that you ask?  I know that because we have such a shortage of homes for sale, that even if home sales decrease substantially, we will still be in a seller's market because our housing inventory is so low.  

Keep in mind that in a balanced real estate market where housing demand and supply are about equal, we would have about a 6 to 7 months supply of homes for sale.  This means that if no one else listed their homes for sale, it would take 6 to 7 months to sell all of the homes at the existing level of demand.  That is a balanced market.  In  today's market, we have been running at about just over a 3 month supply of homes.  This is about half of the level of a balanced real estate market.  So home sales would have to decrease by over 50% in order to go from a seller's market to a buyer's market.  We have NO indication or data that suggest we are going to see a slow down of that magnitude.  

If you were planning on buying a home this year, and you are still able to buy a home, then keep looking for a home.  If you were planning on selling your home this year, then continue to plan on selling if you need to sell.  If you want to and have to luxury to wait a couple months for things to get better and more buyers to enter back into the market before you list your home, that is fine.  If delaying selling is going to cause you a hardship though, then don't delay.  Carry on as you were, with your real estate plans.  

I'm currently working with both buyers and sellers right now, and nice homes that are priced right and show well are still selling quickly and receiving multiple offers!  So if you are wanting to sell, get your home nice and spruced up, and find a good real estate agent to price your home right and properly market your home, and you should be fine. 

To see all of the real estate statistics for Tallahassee as a whole and by each quadrant, please see below.  

Tallahassee as a whole

• Listings Increased by 2.6% (1,646 homes listed for sale) 
• Sales Increased by 5.7% (930 homes sold)

• Average sale price Increased by 10.2%(Average sale price was $243,050)

• Average Sale price/list price ratio went up by 0.97% (Average Sale price to list price was 98.41%)
• Average days on the market to sell decreased by 21.05%  (60 days on the market before selling) 

• Proportion of distressed sales to total sales decreased by 0.12%% (distressed sales made up 2.04% of total sales) 

 

Northeast Tallahassee

 

• Listings Increased  by 8.4% (848 properties listed for sale) 

• Sales increased by 3.7% (417 properties sold)

• Average price increased by 10% (Average price was $323,468)

• Sale price/list price ratio increased by 1% (average sale price/list ratio was 98.49%)

• Average days on the market decreased by 26.8% (52 days on the market on average before selling) 

• The proportion of distressed sales to total sales decreased by 0.3% (distressed sales made up 1.44% of total sales) 

 

Northwest Tallahassee

• Listings Increased by 4.4% (454 properties listed for sale) 

• Sales were unchanged ( 289 properties sold) 

• Average sale price increased by 17.3% (average sale price was $170,002) 

• Average sale price/list price ratio increased by 1.54% (Average sale price/list price ratio was 98.03%)

• Average days on the market before selling decreased 44.8% (58 days on the market on average before a home sold) 

• The proportion of distressed sales compared to total sales increased by 0.7% (distressed sales made up only 2.08% of total sales) 

Southeast Tallahassee

 

• Listings decreased by 1.7% (235 properties listed for sale)

• Sales increased by 14.6% (157 properties sold) 

• Average price Increased by 5.9% (Average sale price was $220,790

• Average sale price/list price ratio decreased by 0.1% (sale price/list price ratio was 99.03%) 

• Average days on the market before a home sold increased by 3.2% (64 days) 

• The proportion of distressed sales compared to total sales decreased by 1.1% (distressed sales made up 2.55% of total sales)  

Southwest Tallahassee

• Listings decreased by 4.4% (109 properties listed for sale) 

• Sales increased by 28.9% ( 67 properties sold) 
• Average sales price increased by 4% (Average sale price was $109,788) 

• Average sale price/listing price ratio increased by 1.81% ( Average sale price/listing price ratio was 96.8%) 

• Average days on the market before the property sold increased by 5.8% (109 days on the market before selling) 

• The proportion of distressed sales compared to total sales decreased by 1.29% (distressed sales made up 4.48% of total sales) 

.

Tallahassee 3rd Quarter Real Estate Market Report

In the 3rd quarter of this year in Leon County we mostly saw a continuation of recent trends in the residential real estate market, but out of the six metrics I looked at, we did see a change in the direction of a couple of the metrics. The changes we saw could be an indication that the market is starting to cool down.  Overall though, the local real estate market is still strong with healthy buyer demand that is supported by a strong economy. 

The number of properties listed for sale continued it's downward trend in the 3rd quarter of this year with fewer properties being listed for sale compared to the 3rd quarter of 2018.  The number of properties sold continued to go up at a healthy pace, indicating that buyer demand for homes is still strong.   Home price appreciation slowed down quite a bit in the 3rd quarter of this year though, with average home prices only going up by a very small amount compared to the 3rd quarter of 2018.    

The average sale price to list price ratio, which measures how much a home sells for relative to it's listing price, went up by only a small amount, and on average it took homes longer to sell in the 3rd quarter of this year compared to last year.  Finally, for the first time in a long time, distressed sales (foreclosures and short sales)  went up and made up a larger percentage of the overall sales compared to the third quarter of last year. 

Let's start off by talking more about what's going on with our housing inventory here locally and the number of properties listed for sale.  As you probably know, we have a shortage of residential properties available for sale here in Leon County and have had a shortage going on for about 3 years now.   In the 3rd quarter of this year, that shortage got worse with the number of properties available for sale going down by 5.8% compared to the 3rd quarter of last year.  We currently have about a 3-4 months supply of housing inventory, meaning that if no properties were listed for sale after today,  all the remaining inventory would sell in 3-4 months.  A normal level of housing inventory is about a 6 months supply.   

This low level of housing inventory is making it tough for home buyers to find properties.  It's taking most home buyers more time to find the right home, and in some cases home buyers have decided to hold off on buying a home because they can't find what they are looking for.  The low housing inventory issue is a complex problem that is not going to go away for some time.  The only way to solve this issue is to build more affordable homes.  A lot more!  Locally, that will be a challenge due to the limited amount of land available for sale to build on, the high cost of city and county permitting fees, strict government regulation, and high cost of building materials and construction labor.  If we had more homes available for sale then we would have higher home sales, but despite the low housing inventory, home sales are still strong. 

Home sales in the 3rd quarter of 2019 saw a year over year increase of 4.6% compared to the same time a year ago.  A strong job market, rising wages,  consumer optimism and low mortgage interest rates are fueling demand for homes.  As long as the economy remains strong, so will home sales.  We just need more homes for people to buy! 

Year over year home prices in Leon County did go up in the 3rd quarter of 2019, but only by a very small amount.  On average, home prices went up by 0.3% compared to the same time last year.  We did see some variation throughout different areas of the county though. Most notably, NE Leon County saw year over year average home prices go down in the 3rd quarter of this year by 2.5% compared to the 3rd quarter of 2018.  In the 3rd quarter of 2018 the average home price in the NE was $306,301 whereas this year it went down to $298,592. I believe this is a correction. Average home prices in the NE part of the county have risen so quickly over the last few years, and now the market is correcting itself.   The other three quadrants of Leon County all saw home prices go up with the NW seeing the biggest year over year price increase at 8.6%.  

The average sale price to list price ratio increased very slightly in the 3rd quarter of this year compared to the 3rd quarter of 2018.  The average sale price to list price ratio measures how much a home sells for compared to it's listing price.  In the 3rd quarter of this year the average sale price to listing price ratio was 98.14% compared to 97.83% in the 3rd quarter of last year.  With homes selling for over 98% of the asking price, it's easy to see we are still in a seller's market.  This is largely due to the low level of housing inventory. 

The average time it took to sell a home in the 3rd quarter of this year was up from a year ago.  On average, homes that sold in the 3rd quarter of this year sat on the market for 64 days before selling.  This is up from 54 days in 2018.  With the low housing inventory and increased buyer demand, it's hard to pinpoint why homes took longer to sell this year on average than they did a  year ago.  

Finally, in the 3rd quarter of this year,  we saw an uptick in distressed sales (foreclosures and short sales) compared to the 3rd quarter of last year.  Distressed sales made up 2.23% of total sales this year compared to only 2.04% in the 3rd quarter of 2018.  This is the first year over year increase in distressed sales I have seen in a very long time.  However, distressed sales still make up a very, very low percentage of overall sales at only 2.23% so I don't think this means we are going to see a wave of distressed properties hit the market.  I think we are now back at a historically normal percentage of distressed sales and the uptick is just a normal fluctuation.  

Again, the real estate market is strong here in Leon County, and it appears it will remain strong for some time to come as long as the overall economy remains strong. I do predict that home prices will probably flat line in the next year.  For a number of years now, home price gains have been outpacing increases in people's wages, and I think now the market is correcting itself.  I think price gains will be flat next year or only go up very slightly.  This trend might go on for the next couple years before we start to see average home prices go up again by any significant amount. 

Interest rates will most likely continue to be low over the next year making it a good time for buyers to lock into a mortgage.  I think one thing that people should pay attention to is the trade deals being made with various countries, and especially with China.  If a trade deal is struck with China this will likely make building materials less expensive and might enable builders to build more homes for less money.  This could help with our housing inventory issues.  If a trade deal is struck with China this will also have other positive effects on the economy such as making the stock market go up which ultimately will increase consumer confidence which is good for housing demand.  If a trade deal is struck and signed into law with Mexico and Canada, this will also have a positive effect on the economy and housing. 

To see all the year over year housing metrics for Leon County as a whole and by each quadrant of Leon County, see below. 

Tallahassee as a whole

• Listings decreased by 5.8% (1587 homes listed for sale) 
• Sales Increased by 4.6% (1239 homes sold)

• Average sale price Increased by 0.3%(Average sale price was $227,778)

• Average Sale price/list price ratio went up by 0.31% (Average Sale price to list price was 98.14%)
• Average days on the market to sell increased by 18.51%  (64 days on the market before selling) 

• Proportion of distressed sales to total sales increased by 0.19%% (distressed sales made up 2.23% of total sales) 

 

Northeast Tallahassee

 

• Listings decreased by 4% (799 properties listed for sale) 

• Sales increased by 3.95% (607 properties sold)

• Average price decreased by 2.5% (Average price was $298,592)

• Sale price/list price ratio increased by 0.55% (average sale price/list ratio was 98.32%)

• Average days on the market increased by 18.75% (57 days on the market on average before selling) 

• The proportion of distressed sales to total sales increased by 0.05% (distressed sales made up 1.49% of total sales) 

 

Northwest Tallahassee

• Listings decreased by 7.4% (435properties listed for sale) 

• Sales increased by 5.9% ( 375 properties sold) 

• Average sale price increased by 8.6% (average sale price was $149,883) 

• Average sale price/list price ratio decreased by 0.43% (Average sale price/list price ratio was 97.41%)

• Average days on the market before selling increased 11.7% (67 days on the market on average before a home sold) 

• The proportion of distressed sales compared to total sales increased by 0.16% (distressed sales made up only 2.7% of total sales) 

Southeast Tallahassee

 

• Listings decreased by 10.1% (240 properties listed for sale)

• Sales increased by 2.9% (177 properties sold) 

• Average price Increased by 6.2% (Average sale price was $201,589

• Average sale price/list price ratio increased by 0.55% (sale price/list price ratio was 98.84%) 

• Average days on the market before a home sold increased by 1.8% (57 days) 

• The proportion of distressed sales compared to total sales increased by 0.03% (distressed sales made up 2.26% of total sales)  

Southwest Tallahassee

• Listings decreased by 2.6% (113 properties listed for sale) 

• Sales increased by 8% ( 81 properties sold) 
• Average sales price increased by 0.72% (Average sale price was $115,828) 

• Average sale price/listing price ratio decreased by 0.78% ( Average sale price/listing price ratio was 96.35%) 

• Average days on the market before the property sold increased by 73% (116 days on the market before selling) 

• The proportion of distressed sales compared to total sales increased by 3.6% (distressed sales made up 6.2% of total sales) 

.

Tallahassee 2nd Quarter Real Estate Market Report

The real estate market heated up  quite a bit in Leon county in the 2nd quarter. In the 2nd quarter of 2019, we continued to see strong demand from home buyers with a year over year increase in home sales. At the same time, we also saw a year over year decrease in the already very low supply of homes available for sale.  We also saw a substantial slow down in year over year price appreciation in the 2nd quarter compared to what we have seen the preceding couple of years.  This year in the 2nd quarter, the sale price to listing price ratio, which measures how much a home sells for compared to it's listing price, remained unchanged from last year.  We also saw the average number of days on the market it took a home to sell go up in the 2nd quarter compared to the same time last year.  Finally, distressed sales (foreclosures and short sales) continued to decrease from last year to the lowest level in over a decade. 

Sales were up 5.3% in the 2nd quarter of 2019 compared to the 2nd quarter of 2018.  A strong job market, strong consumer confidence and a strong overall economy continued to fuel strong demand from home buyers in the 2nd quarter of this year.  Low interest rates also likely played a role in the increase in home sales as buyers were able to borrow money at interest rates below 4% on a 30 year mortgage.  

The number of homes on the market for sale continued to decrease in the 2nd quarter. In the 2nd quarter of this year listings were down 1.5% compared to the 2nd quarter of 2018.  We have had a problem with a low supply of homes for about 3 years now, and it has not seemed to get any better.   There is strong demand from home buyers right now, and if we had a higher supply of homes for sale, we would probably have a higher number of home sales than we have been having.  Many would-be home buyers are sitting on the sidelines and continuing to rent because they are not seeing enough options out there for homes.  The buyers that are in the market actively looking for homes are taking a lot longer to find a home on average compared to a few years ago when housing inventory was higher.  I have worked with lots of home buyers over the last couple of years, and it has taken a lot longer than it use to to find them homes that fits their needs. 

Home prices were up in the 2nd quarter of this year compared to last year, but only by a very small margin.  Year over year, home prices were up only 1.1% in Leon County in the 2nd quarter of this year compared to the 2nd quarter of 2018.  This is much lower than over the past couple years.  In 2017 year over year price gains were close to 10%, and in 2018 year over year price gains were around 5%.  My assessment is that because prices have gone up so much over the last 3 or 4 years, far outpacing wage growth, we are now seeing the market adjust in the form of slowing price appreciation which will allow wage growth to catch up with home prices. I think over the next couple years home prices will stay flat because home prices have reached a level where if they go any higher, homes won't be affordable.  If interest rates go up or we have a broader economic slow down, I would not be surprised if we even see a slight dip in home prices over the next year or two.  If we do see a price drop, I think it will be a very small drop that will serve as a market correction.  

The sale price to listing price ratio stayed exactly the same in the 2nd quarter of this year compared to the 2nd quarter of 2018, with the average home selling for 98.47% of the asking price.  This is a very high sale price to listing price ratio, and is an indication that we are in a sellers market.  The low levels of available housing coupled with strong home buyer demand is without any doubt the cause of the very high sale price to listing price ratio.  

It took a little bit longer on average for homes to sell in the 2nd quarter of this year compared to the same time a year ago. In the 2nd quarter of this year, on average, homes sat on the market 7.27% longer compared to the same time a year ago.  In the 2nd quarter of 2019 it took 59 days on average before a home sold compared to only 55 days in the 2nd quarter of 2018.  

Finally, in the 2nd quarter of this year we saw another year over year drop in the number of distressed sales (foreclosures and short sales).  In the 2nd quarter of 2019 distressed sales only made up 1.23% of total sales!  This is down from the 2nd quarter of 2018 when distressed sales accounted for 3.2% of total sales.  This is of course way down from the peak of the foreclosure crisis when distressed sales accounted for nearly 30% of total sales.  Hard to believe the number of distressed sales on the market has gone down so much.  The days of bargain deals on distressed properties are pretty much behind us now. 

Overall the real estate market and the economy are strong.  With the job market being so strong, I think demand from home buyers will continue to be strong for the foreseeable future.  I also think that the supply of homes will continue to remain at below normal levels for quite some time.  Home price gains are slowing down, and I think home prices will stay flat over the next year or two.  This is not a bad thing though.  It's just the market adjusting to allow for people's wages to catch up with the rapid increase in home prices we have seen over the last few years.  I view this as a good thing because it will help increase affordability which is good for the housing market. 

It appears that interest rates are going to remain low for the foreseeable future, so I don't think changes to interest rates are going to be a factor in our housing market in the near future.  I think that the broader economy could possibly weigh in on how the housing market does over the next year or two.  If the issues we are having with trade wars get worse instead of better, this could have an impact on housing due to it having a negative effect on the overall economy.  Besides that though, it appears that all signs are pointing to the housing market staying strong for the foreseeable future.  

Below are the year over year real estate metrics for Leon County as a whole and for each quadrant of Leon County.  

Tallahassee as a whole

• Listings decreased by 1.5% (1973 homes listed for sale) 
• Sales Increased by 5.3% (1377 homes sold)

• Average sale price Increased by 1.1%(Average sale price was $232,199)

• Average Sale price/list price ratio was unchanged at 98.47%
• Average days on the market to sell increased by 7.27%  (59 days on the market before selling) 

• Proportion of distressed sales to total sales decreased by 1.97% (distressed sales made up 1.23% of total sales) 

 

Northeast Tallahassee

 

• Listings decreased by 7.5% (1,016 properties listed for sale) 

• Sales decreased by 3.4% (627 properties sold)

• Average price increased by 2.7% (Average price was $307,288)

• Sale price/list price ratio decreased by 0.9% (average sale price/list ratio was 98.46%)

• Average days on the market decreased by 4% (48 days on the market on average before selling) 

• The proportion of distressed sales to total sales decreased by 1.2% (distressed sales made up 0.8% of total sales) 

 

Northwest Tallahassee

• Listings increased by 5.1% (563 properties listed for sale) 

• Sales increased by 12.9% ( 438 properties sold) 

• Average sale price increased by 13.9% (average sale price was $159,574) 

• Average sale price/list price ratio decreased by 0.07% (Average sale price/list price ratio was 98.09%)

• Average days on the market before selling increased 3.1% (65 days on the market on average before a home sold) 

• The proportion of distressed sales compared to total sales decreased by 3.2% (distressed sales made up only 0.9% of total sales) 

Southeast Tallahassee

 

• Listings decreased by 3.2% (272 properties listed for sale)

• Sales increased by 9.2% (224 properties sold) 

• Average price decreased by 3.4% (Average sale price was $209,978

• Average sale price/list price ratio increased by 0.76% (sale price/list price ratio was 99.17%) 

• Average days on the market before a home sold increased by 40% (73 days) 

• The proportion of distressed sales compared to total sales decreased by 1.21% (distressed sales made up 2.2% of total sales)  

Southwest Tallahassee

• Listings increased by 31.1% (122 properties listed for sale) 

• Sales increased by 35.4% ( 88 properties sold) 
• Average sales price increased by 7.3% (Average sale price was $115,223) 

• Average sale price/listing price ratio decreased by 0.97% ( Average sale price/listing price ratio was 98.08%) 

• Average days on the market before the property sold increased by 3% (103 days on the market before selling) 

• The proportion of distressed sales compared to total sales decreased by 5.8% (distressed sales made up 3.4% of total sales) 

.

1st Quarter 2019 Tallahassee Residential Real Estate Market Snapshot And Year Over Year Market Statistics.

In the 1st quarter of this year we saw a little bit of a slow down compared to the 1st quarter of 2018.  Both the number of properties listed for sale, and the number of properties sold went down.  After seeing an uptick in the number of properties listed for sale in the previous 3 quarters of 2018, the first quarter of 2019 was the first time in a year that we have seen a year over year drop in the number of properties listed for sale.  With already having a shortage of housing inventory to meet the growing demand for housing in our improving economy, the year over year decrease in the number of homes available for sale that we saw in the first quarter was bad news for home buyers.  We also saw an increase in the average number of days on the market it took to sell a home.  

Despite the slow down in sales and number of listings, year over year home prices continued to climb at a modest pace in the first quarter of 2019.  The average sale price to listing price ratio was basically flat in the first quarter of this year compared to the same time a year ago, going down just slightly.  The average sales price/listing price ratio measures how much a home sells for compared to it's listing price.    

Lastly, distressed sales (foreclosures and short sales), made up a smaller percentage of total sales in the 1st quarter of 2019 compared to the same time period a year prior.  Distressed sales sell at a discount compared to non distressed sales, and they bring down the values of surrounding properties. 

Let's start out by talking more about the number of properties listed for sale.  As mentioned above, the number of properties listed for sale saw a drop in the 1st quarter of 2019 compared to the first quarter of 2018.  Year over year property listings decreased by 1.9% in the first quarter of 2019 which was a reversal of trend from the last 3 quarters of 2018 where we saw the number of listings going up for the first time in several years.  

Over the last few years, we have had a major shortage of homes available for sale to meet the growing demand from home buyers.  The reduction in listing inventory that we saw in the 1st quarter of this year is bad for our real estate market because we are still well below what is considered a normal and balanced level of housing inventory.  Because of this shortage of housing inventory, many would-be home buyers are continuing to rent because they don't feel they can find the home that they want.  It's possible that the 1st quarter of this year was just an anomaly instead of a reversal of a trend of growing inventory levels.  This is something to keep an eye on.  If housing inventory levels start going back up then that is a good thing.  If they continue to go down or remain flat, then it could be bad news for our real estate market in the form of fewer home sales. 

We did see home sales go way down in the first quarter of 2019 compared to the 1st quarter of 2018.  Home sales fell 10.9% in the first quarter of this year compared to 1st quarter of 2018.  This was the worst year over year drop in sales we have had in quite some time.  Lack of available homes for sale is one contributing factor to the drop in home sales.  Also, it's possible that the damage Tallahassee incurred from Hurricane Michael in October could have had a negative impact on home sales in the first 

quarter of this year.  If home sales go back up in the 2nd and subsequent quarters of this year, then it's likely that the 1st quarter slowdown we had earlier this year was just a temporary slow down.  If we see a continuation of decreased year over year sales, then it probably means the slow down is being caused mainly by broader economic conditions such as low inventory levels and/or a trend of more people choosing to rent instead of buying. 

 

Despite the number of listings and the number of sales falling in the first quarter of this year, home prices continued to go up in the 1st quarter of this year in Leon County.  Home prices went up 3.8% in the first quarter of this year compared to the first quarter of 2018.  This rate of increase falls in line with what would be considered a historically normal rate of increase between 3%-5%.  The overall strong economy, with increasing wages, has kept buyer demand for housing strong. This strong demand for housing is one of the big factors contributing to home values continuing to rise.  Also, the shortage of available housing inventory is the second major contributor to increasing home values.  It's really basic economics that is driving up home prices.  Strong demand for homes coupled with a low supply of homes is a recipe for increasing home prices!  

 

The sale price to listing price ratio was pretty much flat in the 1st quarter of 2019 compared to the first quarter of 2018 with just a very small decrease.  In the first quarter of 2019 the average sale price/listing price ratio was 97.44% which means that on average, homes sold for 97.44% of the listing price.  This is a high sale price/listing price ratio, and it's indicative that we are in a very strong sellers market.   In the first quarter of 2018, the average sale price/listing price ratio was 97.73% which was just slightly higher then it was in the first quarter of this year. 

 

We did see a pretty good size year over year increase in the average number of days it took a home to sell in the first quarter of this year. In the first quarter of this year,  on average it took 75 days on the market before a home went under contract.  This is up from 67 days in the first quarter of 2018.  Most likely it's the increasing home prices that are causing homes to sit on the market longer than they did last year.  With the decrease in sales, it's clear there are fewer people buying homes this year than last year.  With the higher prices and fewer number of people buying homes this year, it's only natural that homes would be sitting on the market a little bit longer this year than last year. 

 

Distressed sales made up a smaller percentage of total sales in the first quarter of 2019 compared to the same time a year ago.  Again, distressed sales are short sales and foreclosures.  They typically sell at a discount compared to non-distressed sales.  Distressed sales only made up 2% of total sales in the first quarter of 2019 which is down from 4% in the first quarter of 2018.  Fewer distressed sales is good for helping to ensure that home prices continue to go up. 

 

Overall, we had a bit of a slow first quarter this year, but no indications of any serious issues with our real estate market.  It is very possible that the slow down can be partly attributed to the damage that many homes incurred from Hurricane Michael in October 2018.  Many homes in Tallahassee suffered damage from Hurricane Michael and plans for people listing their homes for sale could have been delayed because of the damage.   Whether it was Hurricane Michael that caused the slow down or whether it was other broader economic factors such as increasing home prices, it does seem that the slow down we saw in the first quarter will be short lived.  The 2nd quarter thus far has been very busy, so things seem to be picking back up.  I think the remainder of the year we will see home sales at about the same pace we saw in 2018 or possibly just slightly less.  

 

The problem we are having with low levels of housing inventory will most likely continue to persist for the remainder of the year and even beyond.  As i've said before, I think the problem we are having with low levels of housing inventory is a long term issue that won't easily or quickly be resolved.  New construction prices are being driven up by a scarcity of land to build on, high permitting fees from the city and county, increasing construction material costs and a small and largely under-skilled pool of construction labor.  Until the price of new construction homes comes down, I think we will see both inventory levels and home sales lower than they should be.  

 

One thing I would pay attention to this year is the overall economy and trade deals with other countries...especially China.   Currently the economy is doing good and jobs and wages are increasing.  We have some trade negotiations that are underway right now, and if these trade deals get worked out it could cause construction material prices to go down some and help ease the high costs of new construction homes.  If we get a trade deal worked out with China, it will help the real estate market and the overall economy by reducing costs of goods and services and boosting consumer confidence.  Higher consumer confidence equals more people buying homes!  

 

I would also pay attention to interest rates. Interest rates have continued to stay low.  They will most likely remain low throughout the rest of the year, but if they do start going up, this could curb home sales.  

 

To see a list of the real estate metrics I compiled for Leon County as a whole as well as by  individual quadrant, see below. 

 

Tallahassee as a whole.  

• Listings decreased by 1.9% (1,570 Homes listed for sale

• Sales decreased by 10.9% (876 properties sold)

• Average sale price Increased by 3.8% (Average sale price was $226,614)

• Average Sale price/list price ratio decreased by 0.29% (97.44%)

• Average days on the market to sell increased by 12% (75 days on the market before selling) 

• Proportion of distressed sales to total sales decreased by 2% (distressed sales made up 2% of total sales) 

 

Northeast Tallahassee

 

• Listings decreased by 4.7% (755 properties listed for sale) 

• Sales decreased by 18.7% (399 properties sold)

• Average price increased by 10.5% (Average price was $294,880)

• Sale price/list price ratio decreased by 0.26% (average sale price/list ratio was 97.5%)

• Average days on the market increased by 24.6% (71 days on the market on average before selling) 

• The proportion of distressed sales to total sales decreased by 1.1% (distressed sales made up 1.5% of total sales) 

 

Northwest Tallahassee

• Listings decreased by 2.2% (469 properties listed for sale) 

• Sales increased by 5.5% ( 289 properties sold) 

• Average sale price decreased by 3.9% (average sale price was $144,953) 

• Average sale price/list price ratio decreased by 1.5% (Average sale price/list price ratio was 96.49%)

• Average days on the market before selling increased 12% (84 days on the market on average before a home sold) 

• The proportion of distressed sales compared to total sales decreased by 4.1% (distressed sales made up only 1.4% of total sales) 

Southeast Tallahassee

 

• Listings decreased by 2.1% (234 properties listed for sale)

• Sales decreased 5.5% (136 properties sold) 

• Average price increased by 3.8% (Average sale price was $208,763)

• Average sale price/list price ratio increased by 1.35% (sale price/list price ratio was 99.12%) 

• Average days on the market before a home sold decreased by 18.9% (60 days) 

• The proportion of distressed sales compared to total sales decreased by 0.5% (distressed sales made up 3.7% of total sales)  

Southwest Tallahassee

• Listings increased by 5.8% (112 properties listed for sale) 

• Sales decreased by 29.7% ( 52 properties sold) 
• Average sales price decreased by 0.04% (Average sale price was $105,573) 

• Average sale price/listing price ratio decreased by 0.84% ( Average sale price/listing price ratio was 94.99%) 

• Average days on the market before the property sold increased by 10.8% (103 days on the market before selling) 

• The proportion of distressed sales compared to total sales decreased by 1% (distressed sales made up 5.8% of total sales) 

Tallahassee 4th Quarter Real Estate Market Report

4th Quarter 2018 Tallahassee Residential Real Estate Market Snapshot And Year Over Year Market Statistics.

In the 4th quarter of 2018 Leon County saw the inventory of homes go back down again by a small margin compared to the 4th quarter of 2017.  This is a contrast to the first 3 quarters of 2018 when we saw year over year housing inventory levels go up by substantial margins.  Sales were also down in the 4th quarter of 2018 compared to the 4th quarter of 2017.  Even though both year over year listing and sales activity were down in the 4th quarter of 2018, home prices continued to charge ahead in the last quarter of 2018 going up substantially compared to last quarter of 2017.  

The average number of days on the market it took to sell a home went down in the 4th quarter of 2018 compared to a year earlier.  Also, the average sale price/ listing price ratio of homes was down by a little bit in the 4th quarter of last year compared to the 4th quarter of 2017.  The sale price/listing price ratio measures how much a home sells for compared to the listing price of the home.  Lastly, distressed sales (foreclosures and short sales) continued to go down in the 4th quarter of 2018 making up a lesser percentage of total sales compared to the 4th quarter of 2017.  

As mentioned above, the number of properties listed for sale decreased in the 4th quarter of 2018 compared to the 4th quarter of 2017.  Year over year listings only went down by 3%, but this reversed a trend of 3 straight quarters where we saw rising inventory levels of homes.  Tallahassee's residential real estate market has been plagued with very low levels of housing inventory over the past 3 years, so the year over year decrease in housing inventory that we saw in the 4th quarter of last year is not a good thing.  Buyer demand for houses has been increasing steadily the past several years as the economy has improved and wages have gone up.  Because of this, we need housing inventory levels to go up to meet the growing demand.  If we had more homes for sale, there is no doubt in my mind that home sales would be higher.  Because of the lack of housing inventory to choose from (especially in the lower price range of homes) many would-be home buyers are sitting on the side lines and continuing to rent.  This is no doubt a big factor in why we saw year over year home sales decrease in the 4th quarter of 2018.  It should be noted that the hurricane that hit Tallahassee in October might have caused fewer people to list their homes in the fourth quarter causing the inventory levels to be lower than they would have been had the hurricane not hit Tallahassee. 

Year over year sales of residential real estate decreased by 5.1% in the 4th quarter of 2018 in Leon County.  I believe there are several factors causing the slow down in home sales.  As mentioned above, the lack of homes to choose from has caused many would be buyers to opt to continue to rent instead of buying since they feel like there are not enough options of homes to choose from.  Another reason I believe year over year home sales were down in the 4th quarter is because of the rise in interest rates on home loans.  In the 4th quarter of 2018 interest rates got close to 5% for a 30 year fixed rate mortgage which is about a full percentage point higher than the rates were at the end of 2017.  The higher interest rates combined with rising home prices is making buying a home more expensive, and this is pushing some would-be home buyers out of the housing market. Finally, I believe that the damage incurred throughout Leon County from Hurricane Michael in October also had a dampening effect on home sales in the 4th quarter.    

Even though both the number of properties sold and the number of properties listed for sale went down in the 4th quarter of 2018, year over year home prices went up by a significant margin in the last quarter of 2018.  On average, year over year home prices increased by 8.2% in the last quarter of 2018 in Leon County.  Historically home prices increase by about 3%-5% a year, so this is well above an average level of appreciation for housing.  It should be noted though that different areas of Leon County saw much more appreciation in prices than other parts.  For example, in the Northeast Leon County homes appreciated by a whopping 15.3% while in NW Leon County, home prices actually went down by 5.1%.  In SE Leon County, home prices increased by 2.6% while in SW Leon County home prices went down by a whopping 15.3%.  So most of the appreciation in values was concentrated in the NE part of the county.  This is likely due to the increase in the number of new construction homes that have been selling in NE Tallahassee which has pushed prices up in that part of Leon County. 

The year over year average sale price/listing price ratio of homes went down by 0.29% in the 4th quarter of 2018.  The average sale price/listing price ratio was 97.65% in the last quarter of 2018 compared to 97.94% in the 4th quarter of 2017.  The sale price/listing price ratio measures what a home sells for compared to the asking price of the home.  Even though we saw this metric decrease very slightly in the 4th quarter of 2018, it's still very high by historical standards, and it signifies that we are in a strong seller's market.  The most likely reason we saw this metric go down by a little bit is because average home prices went up by a significant margin. 

Homes sold faster on average in the 4th quarter of 2018 compared to the 4th quarter of 2017.  In fact, in the 4th quarter of last year,  the number of days a home sat on the market before selling decreased by 8.6% compared to a year earlier going from 70 days to 64 days.  The decrease in the number of days it took for a home to sell is a combination of both fewer homes on the market and a strong demand from home buyers.  

Finally, we saw distressed sales (foreclosures and short sales) go down in the 4th quarter of 2018 compared to a year earlier.  Distressed sales only made up 3.21% of all home sales in the 4th quarter of 2018 compared to 5.07% in the 4th quarter of 2017.  We have the lowest amount of distressed on the market now since before the housing market collapsed in 2007.  The decrease in distressed sales is good because distressed sales typically sell at a discount bringing down property values of surrounding properties.  

Overall the real estate market in Leon County is strong and stable.  Home prices continue to go up on average as buyer demand continues to be strong.  We still have less housing inventory than we need, and this has been and will continue to be our real estate market's greatest challenge for some time to come.  The low level of housing inventory for sale is a long term problem I believe caused by an inadequate level of construction of affordable new homes.  The issue is that it's extremely hard to build homes at an affordable price.  Land prices are high, county and city permitting fees are high, construction material costs are high, and there is a shortage of labor in the construction industry.  These problems mentioned above, which make it hard to build affordable homes, are not going to go away any time soon, so because of this I think our problem with a lack of housing inventory for sale is going to be with us for years to come.  

In 2019  I think we can expect interest rates be fairly stable, increasing just slightly.  I also think we will see home prices increase as well but more moderately than we saw in 2018.  I would expect that we will have a robust Spring and Summer selling season here in Tallahassee.  So if you are looking to sell your home this year, I would plan on getting on the market no later than in May so you don't miss out on the selling season.  If you are looking to buy a home this year,  I would start looking now before the market gets red hot between April and June.  If buying a home, you will face lots of competition from other buyers during those peak selling months between April and June. 

Below I have listed all of the metrics for Tallahassee as a whole and for each quadrant of Tallahassee for the 4th quarter of 2018.  

Tallahassee as a whole

• Listings decreased by 3% (1,046 Homes listed for sale

• Sales decreased by 5.1% (841 properties sold)

• Average sale price Increased by 8.2% (Average sale price was $227,064)

• Average Sale price/list price ratio decreased by 0.29% (97.65%)

• Average days on the market to sell decreased by 8.6% (64 days on the market before selling) 

• Proportion of distressed sales to total sales decreased by 1.86% (distressed sales made up 3.21% of total sales) 

 

Northeast Tallahassee

 

• Listings increased by 1.5% (537 properties listed for sale) 

• Sales decreased by 1.6% (426 properties sold)

• Average price increased by 15% (Average price was $306,211)

• Sale price/list price ratio decreased by 0.52% (average sale price/list ratio was 97.67%)

• Average days on the market decreased by 3.3% (59 days on the market on average before selling) 

• The proportion of distressed sales to total sales decreased by 1.7% (distressed sales made up 1.6% of total sales) 

 

Northwest Tallahassee

 

• Listings increased by 7.4% (277 properties listed for sale) 

• Sales decreased by 7.1% ( 223 properties sold) 

• Average sale price decreased by 5.1% (average sale price was $133,045) 

• Average sale price/list price ratio increased by 0.3% (Average sale price/list price ratio was 97.88%)

• Average days on the market before selling went down 14.5% (65 days on the market on average before a home sold) 

• The proportion of distressed sales compared to total sales decreased by 0.6% (distressed sales made up 4% of total sales) 

Southeast Tallahassee

 

• Listings Increased by 3.4% (178 properties listed for sale)

• Sales decreased 7% (133 properties sold) 

• Average price increased by 2.6% (Average sale price was $190,637)

• Average sale price/list price ratio increased by 0.2% (sale price/list price ratio was 98.11%) 

• Average days on the market before a home sold decreased by 17.6% (61 days) 

• The proportion of distressed sales compared to total sales decreased by 4.6% (distressed sales made up 3.8% of total sales)  

Southwest Tallahassee

• Listings decreased by 23% (54 properties listed for sale) 

• Sales increased by 13.5% ( 59 properties sold) 
• Average sales price decreased by 15.3% (Average sale price was $93,067) 

• Average sale price/listing price ratio decreased by 1.12% ( Average sale price/listing price ratio was 94%) 

• Average days on the market before a property sold decreased by 16.2% ( 98 days) 

• The proportion of distressed sales compared to total sales decreased by 3.2% (distressed sales made up 10.2% of total sales) 

Tallahassee 3rd Quarter Real Estate Market Report

Bobby's Real Estate Column

3rd Quarter 2018 Tallahassee Residential Real Market Snapshot And Year Over Year Market  Statistics. In the 3rd quarter of this year, Tallahassee's residential real estate market continued to do well.  Home prices in the 3rd quarter of this year saw very strong gains compared to the same time last year.  Also, housing inventory increased sharply compared to the same time a year ago.  The increased housing inventory is much needed and is welcomed by home buyers. In the last 2-3 years, our residential real estate market here is Tallahassee has had a major shortage of homes for sale.  This has made shopping for a home very frustrating for home buyers over the last few years.   Home sales saw a very slight decrease in the 3rd quarter of this year compared to the same time period a year ago.  Rising home prices and rising mortgage interest rates seem to finally be slowing down home sales just a tad.  The average number days it took to sell a home dropped down quite a bit compared to last year, and the average sale price/list price ratio, which measures how much a home sells for compared to it's listing price, stayed about the same as last year going down just slightly.    Lastly, we saw fewer distressed sales (short sales and foreclosures) in the 3rd quarter of this year compared to the same time a year ago. Distressed sales are not good because they generally sell at a discount compared to non distressed sales, and they bring down the values of surrounding properties.  The reduction in distressed sales is a sign that the real estate market is doing well.   So let's start off by talking more in depth about the increase we saw in the number of listings available for sale in the 3rd quarter of this year.  New listings jumped up by a whopping 16% in the 3rd quarter compared to the same time a year ago.  Our market needs the higher level of housing inventory, so this is great news.  Over the last 3 years, a growing number of home buyers have been fighting like cats and dogs over fewer and fewer listings. Multiple offers and properties selling above asking price has become the norm is seems!  Last year in 2017, the number of listings on the market dropped to just a little over a 3 month supply of homes for sale. This is about half of the 6 month supply of homes that is considered normal.  The months supply of homes means is that if no more homes were listed after today, it would take that many months to sell the remaining inventory of homes.  So for example,  with a 3 months supply of homes it would take 3 months to sell all existing inventory if no more homes were listed for sale.  We're now starting to see big jumps in housing inventory levels due to more new construction taking place and more homeowners deciding to cash in on the high prices and put their homes on the market.  If housing inventories continue to go up like we saw them go up in the 3rd quarter of this year, then we could be back to a normal 6 month supply of housing inventory within the next couple of years.   Despite the growing number of properties listed for sale, home prices continued on a sharp upward trajectory in the 3rd quarter of this year.  Average year over year sales prices in the 3rd quarter of 2018 in Tallahassee increased by a whopping 9.1%.  This is far above the 3%-5% range that's considered historically normal.  The strengthening economy is creating more demand for homes as more people have jobs and incomes are going up.  Although the supply of homes is starting to finally go up, it's still very low.  Low levels of housing supply along with strong demand from home buyers has caused home prices to continue to go up.  With the number of homes for sale continuing to go up, we can expect to see price growth cool off within the next year or so.  I think next year we will most likely see home prices fall back into a normal range of appreciation between 3%-5%. Home sales stagnated in the 3rd quarter in Tallahassee, going down just slightly compared to the same time last year.  It appears that rising home prices and rising interest rates are finally starting to curb home sales as the cost of owning a home has gone up quite a bit in the last year. Again, the average home price went up by over 9% within the last year, and the average rate on a 30 year fixed rate mortgage went up from 3.89% a year ago to 4.85% at present time.  The combination of higher home prices and interest rates means that people's mortgage payments are going up.  Even though people's wages are going up, the cost of home ownership is far outpacing the increase in people's wages.   The average number of days a home sat on the market before selling went down by 17.2% in the 3rd quarter of this year compared to the same time a year ago.  Average days on the market to sell a home dropped from 64 days in the 3rd quarter of 2017 to 53 days in the 3rd quarter of 2018.  The shorter selling time is an indication that demand from home buyers is strong.  The year over year average sale price/listing ratio, which measures how much a home sells for compared to it's listing price, went down just slightly in the 3rd quarter of this year dropping from the 97.88% in the 3rd quarter of last year to 97.82% in the 3rd quarter of this year. This high sale price/listing price ratio again confirms that we are in fact in a seller's market with sellers getting  about 2% under asking price.  Not too bad if you are a seller!  Finally, distressed sales in Tallahassee (short sales and foreclosures) as a percentage of total sales, dropped down in the 3rd quarter to the lowest level that I have seen since before the housing market collapsed back in 2007.  Distressed sales only made up 2% of overall sales in the 3rd quarter of this year.  This is down from 3.6% in the 3rd quarter of 2017. If you are an investor with lots of cash burning a hole in your pocket, you probably miss the days when distressed sales made up nearly 30% of properties and people could not give their properties away!  Today's market is definitely not a good market for investors looking to capitalize on buying distressed sales at a discount.  The good deals on investment properties are now far and few between.  Overall I think that our real estate market is in the process of transitioning from a seller's market to more of a normal market that will be about equally favorable for buyers and sellers.  Prices are still going up, but as housing inventory continues to grow, we will see prices start to soften and level out within the next year or two as sellers have to compete with more homes in order to get their homes sold.  Also, rising interest rates will probably have a modest affect on home sales causing home sales to stay about the same or go down a little bit. The market is certainly not going to drop off the cliff like in 2007.  It's just going to be a gradual leveling out.  If you are a home buyer this means you will have more choices of homes, and you won't feel as much pressure to move so quickly or to over pay to get the house you want.   If you are a seller, it means that you are going to have to make your home nice and presentable and price it competitively and in line with what other comparable homes are selling for.  I do think that 2019 will still be a seller's market here in Tallahassee, but by 2020 I think we will be in more of a balanced market.   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 increased by 16% (1,635 Homes listed for sale) Sales decreased by 1.5% (1,175 properties sold)  Average sale price Increased by 9.1% (Average sale price was $226,290) Average Sale price/list price ratio decreased by 0.06% (97.82%) Average days on the market to sell decreased by 17.2% (53 days on the market before selling)  Proportion of distressed sales to total sales decreased by 1.6% (distressed sales made up 2% of total sales)    Northeast Tallahassee   Listings increased by 12.6% (814 properties listed for sale)  Sales Increased by 1.6% (576 properties sold) Average price increased by 9.2% (Average price was $305,498) Sale price/list price ratio decreased by 0.08% (average sale price/list ratio was 97.76%) Average days on the market decreased by 12.7% (48 days on the market on average before selling)  The proportion of distressed sales to total sales decreased by 0.2% (distressed sales made up 1.4% of total sales)    Northwest Tallahassee Listings increased by 14.9% (448 properties listed for sale)  Sales decreased by 1.4% ( 352 properties sold)  Average sale price increased by 1.1% (average sale price was $137,999)  Average sale price/list price ratio decreased by 0.2% (Average sale price/list price ratio was 97.83%) Average days on the market before selling went down 10.4% (60 days on the market on average before a home sold)  The proportion of distressed sales compared to total sales decreased by 2.7% (distressed sales made up 2.6% of total sales)  Southeast Tallahassee   Listings Increased by 26.6% (262 properties listed for sale) Sales decreased 9.4% (173 properties sold)  Average price increased by 10% (Average sale price was $189,586) Average sale price/list price ratio increased by 0.24% (sale price/list price ratio was 98.32%)  Average days on the market before a home sold decreased by 20% (56 days)  The proportion of distressed sales compared to total sales decreased by 2.4% (distressed sales made up 2.3% of total sales)   Southwest Tallahassee Listings increased by 23% (111 properties listed for sale)  Sales decreased by 6.3% ( 74 properties sold)  Average sales price increased by 23.9% (Average sale price was $115,535)  Average sale price/listing price ratio increased by 0.36% ( Average sale price/listing price ratio was 97.10%)  Average days on the market before a property sold decreased by 41.6% ( 59 days)  The proportion of distressed sales compared to total sales decreased by 4.9% (distressed sales made up 2.7% of total sales)