Tallahassee Real Estate Market Statistics for 09/01/2011-12/31/2011

Today I will be giving you an update on the current condition of Tallahassee's real estate market. Once again I have taken the liberty of doing some research, and using the Tallahassee Board of Realtors MLS statistics, I have pulled and analyzed some very useful data that I will be using here today to give you an idea of how Tallahassee's residential real estate market is doing. In my research I made year to year comparisons covering and comparing the time periods of September 1st 2010 through December 31st 2010 to September 1st 2011 through December 31st 2011. To make my data as meaningful as possible, I divided properties by both price range and location. I divided the properties up into 5 different price ranges and 4 different areas of Leon County. In my research I looked up the number of homes listed for sale during those time periods, the number of homes sold in those time periods, the average sale price of the homes that sold in those time periods, the average number of days it took for a home to sell in those time periods, and the sale price to list price ratio (this is the average % of what a home sold for compared to what it was listed for sale at). I also looked at what I call the "distressed sales/total sales ratio" This ratio is the number of distressed sales (foreclosures and short sales) divided by the total number of sales. This figure is important because the higher this ratio is the more downward pressure on home prices there will be. Below is a summary of the data that I found categorized by price range and for Tallahassee as a whole.

Year Over Year Market Statistics for Tallahassee as a whole

• 22.9% decrease in the number of properties listed for sale (1,057)


• 2.1% increase in the number of properties sold (677)


• 7.3% decrease in the average sale price ($166,652)


• 36 day increase in the average amount of time it took to sell a home (148)


• 0.68% decrease in the average sale price to list price ratio (94.37%


• 4.7% increase in the distressed sales/total sales ratio (24.5%)

Summary of Tallahassee's Real Estate

Once again it appears that Tallahassee's real estate market improved in the last trimester of 2011 compared to the last trimester of 2010. We have seen a substantial decrease in the number of properties listed for sale, while at the same time we saw an increase in the total number of properties that sold. A decreasing number of properties listed for sale ( a decrease in the supply of residential properties) along with an increase in the number of properties sold (an increase in the demand for residential properties) is exactly what our local real estate market needs in order for home prices to begin to rise again. However, it appears that the supply of residential properties needs to decrease even further and the demand for residential properties needs to increase even further before we will begin to see prices of residential property in Tallahassee begin to rise again. I think the trend of decreasing housing inventory and increasing sales will continue on in Tallahassee in 2012, and I think that it will probably be 2013 before we begin to see the average sale price of homes in Tallahassee begin to rise again.

Another important factor to consider when you are trying to determine the condition of our local real estate market in Tallahassee and how soon it might recover is the amount of distressed property sales compared to total property sales, or as I like to call it, the distressed sales/total sales ratio. In the last trimester of 2011 the distressed sales/total sales ratio was 24.5% . That is a 4.7% increase from the same time period in 2010. This increase in the distressed sales/total sales ratio has played a large role in why home prices in Tallahassee have continued to go down. In order for home prices to go up again in Tallahassee, we are going to need to see the distressed sales/total sales ratio go down. This is because distressed property sales (which are mostly foreclosure sales and short sales) sell at a discounted price below market value. When these properties sell, they bring down the value of the surrounding properties thus depressing prices.

A decrease in the distressed sales/total sales ratio will most likely not happen in Tallahassee in 2012. Banks are still holding a large amount of shadow inventory ( homes that the banks own but have not yet put on the market for sale), and it is very likely that they will start releasing a lot of this shadow inventory onto the market this year at an even faster pace than last year. With that being said, it is most likely the number of distressed sales will increase which will continue to supress home prices in Tallahassee in 2012.

In the last trimester of 2011, we saw a small decrease in the average sale price to list price ratio compared to the same time period in 2010. This is a clear indication that our local real estate market has become just a little bit more of a buyer's market since a year earlier.

In the last four months of 2011 it took on average an extra 36 days to sell a home compared to the same time period a year earlier.

One important thing to note about Tallahassee's real estate market is that the market statistics do vary from area to area and/or from price range to price range. We saw the biggest drops in home prices and the biggest increases in the distressed sales/total sales ratio in the lower price ranges. When you get into the middle and upper price ranges, you actually see some areas where prices are increasing, and it appears that the market for homes in those price ranges, in certain areas of town, is getting better. The market for middle and upper price range properties seems like it is on the brink of entering a recovery stage in which prices are bottoming out and will begin increasing on a consistent basis.

The market for properties in the lower price ranges on the other hand has a longer way to go before we see prices begin to start going up again. The reason for this is that you had a lot of overbuilding in the lower price range during the boom years which lead to an over supply of properties. We still need to reduce the supply of these properties before prices can begin going up again. Second, since many of these properties were built and sold during boom years, a lot of these properties are underwater which in a lot of cases has lead to these properties being foreclosed on or sold as short sales. With a very high percentage of the sales in this price range being distressed sales, home prices have been and will continue to be suppressed.

One thing is for certain though, if you are in the market to purchase a residential property in Tallahassee, 2012 will be a great year to do so. Prices in Tallahassee are at levels that we have not seen since 2002, and interest rates on home loans are as low as they have ever been.

Year over year market statistics for the $0-$125,000 price range

Northeast Tallahassee

• 23.2% decrease in the number of properties listed for sale (66)


• 32.5% increase in the number of properties sold (53)


• 13.1% decrease in the average sale price ($87,586)


• 4.7% decrease in the average sale price to list price ratio (88.05%)


• 50 day increase in the average number of days it took for a property to sell (159 days)


• 5.8% increase in distressed sales/total sales ratio (28.3%)

Northwest Tallahassee

• 28.7% decrease in the number of properties listed for sale (186)


• 11.5% increase in the number of properties sold (126)


• 7.7% decrease in the average sale price ($70,926)


• 2.8% increase in the average sale price to list price ratio (89.18%)


• 39 day increase in the average number of days it took for a property to sell (136 days)


• 2.7% decrease in the distressed sales/total sales ratio (38.9%)

Southeast Tallahassee

• 26.6% decrease in the number of properties listed for sale (94)


• 28.2% increase in the number of properties sold (59)


• 13.3% decrease in the average sale price ($67,918)


• 6.97% decrease in the average sale price to list price ratio (88.72)


• 107 day increase in the average number of days it took for a property to sell (198 days)


• 21.1% increase in the distressed sales/total sales ratio (40.74%)

Southwest Tallahassee

• 25.9% decrease in the number of properties listed for sale (60)


• 11.6% decrease in the number of properties sold (38)


• 8.7% decrease in the average sales price ($51,598)


• 11.45% increase in the average sale price to list price ratio (93.28%)


• 35 day increase in the average number of days it took to sell a property (163 days)


• 23% increase distressed sales/total sales ratio (57.9%)

Summary of The $0-$125,000 price range

In the last trimester of 2011, we saw both a substantial decrease in the number of properties listed for sale and a substantial increase in the number of properties sold in this price range. The high distressed sales/total sales ratio in this price range is the main contributing factor causing the continuation of falling home prices in this price range. As stated before, distressed sales usually sell at a discount compared to non-distressed sales. When these distressed properties sell at a discount they bring down the values of surrounding properties.

The average sale price to list price ratio of homes that sold in this price range was lower in the last trimester of 2011 compared to the last trimester of 2011 which means that buyers who are shopping for properties in this price range have more negotiating power than they did last year. With many property sales coming from foreclosure sales and short sales, the decrease in the average sale price to list price ratio does not come as too much of a surprise. Banks have a huge stake in these foreclosure and short sale properties. The longer it takes to sell these properties, the more money the banks lose. Because of this, banks are starting to let properties go for values further below what the properties are listed for sale at just so the banks can get these properties off of their books. With foreclosures and short sales making up between 30%-40% of properties in this price range, it's no wonder why the average sale price to list price ratio has decreased.

The average number of days it takes to sell a property in this price range has increased from the same time period a year earlier. Again, a lot of this is most likely attributed to the the high number of short sale and foreclosure sales that are taking place in this price range. Distressed sales typically take longer to close on due to problems such as title issues, problems with the condition of the properties that are discovered in home inspections, and because of lengthly short sale processes.

The increase in the number of properties sold and the decrease in the number of properties listed for sale is a positive sign though. With the supply of homes on the market decreasing and the demand for homes increasing, it should only be a matter of time before prices bottom out and begin increasing again. How long will it take before we reach that point is still uncertain. It does appear that the rate at which prices are decreasing is slowing down, so that is a good sign that indicates that the worst is behind us.

Compared to the higher price ranges, this price range will most likely be the last price range of properties to see prices appreciate. This is because of the over supply of homes in this price range and because this price range has the highest distressed sales/total sales ratio

Year over year market statistics for the $125,001-$250,000 price range.

Northeast Tallahassee

• 17.3% decrease in the number of properties listed for sale (268)


• 11.6% increase in the number of properties sold (202)


• 5.7% decrease in the average sales price ($181,229)


• 0.18% decrease in the average sale price/list price ratio (96.33%)


• 12 day increase in the average amount of time it took to sell a property (121 days)


• 7.7% increase in the distressed sales/total sales ratio (18.2%)

Northwest Tallahassee

• 33.6% decrease in the number of properties listed for sale (85)


• 7.5% increase in the number of properties sold (49)


• 2.4% increase in the average price of a home sold ($166,696)


• 0.58% decrease in the average sale price/list price ratio (96.14%)


• 82 day increase in the average number of days it took to sell a home (235 days)


• 3% decrease in the distressed sales/total sales ratio (10.2% of total sales were distressed sales)

Southeast Tallahassee

• 31.3% decrease in the number of properties listed for sale (55)


• 40% decrease in the number of properties sold (30)


• 0.9% decrease in the average sale price ($176,764)


• 0.29% decrease in the average sale price to list price ratio (95.36%)


• 81 day increase in the average number of days it took to sell a home (161 days)


• 4.7% decrease in the distressed sales/total sales ratio (13.3% of total sales were distressed sales)

Southwest Tallahassee

• 6.3% decrease in the number of properties listed for sale (15)


• 125% increase in the number of properties sold (9)


• 5.2% increase in the average sales price ($156,120)


• 4.66% decrease in the average sale price to list price ratio (96.88%)


• 42 day decrease in the average number of days it took to sell a property (105 days)


• No change in distressed sales/total sales ratio ( there were no distressed sales in either year.)

Summary of the $125,001-$250,000 price range

In all areas of Tallahassee in this price range, we saw a decrease in the number of properties listed for sale and an increase in the number of properties sold. In the northwest and southwest parts of Tallahassee, the average sale price increased. In the northeast and southeast parts of town, we saw a decrease in the average sales price. In northeast Tallahassee we saw an increase in the distressed sales/total sales ratio. In all areas of Tallahassee we saw a slight decrease in the average sale price to list price ratio indicating that buyers have gained some negotiating power compared to last year. You could also take this to mean that the market for homes in this price range has shifted a little bit more towards being a buyer's market. Although it should be noted that this shift is a very small shift.

With the decrease in the number of properties listed for sale, an increase in the number of properties sold, an increase in the average sales prices of homes in half of Tallahassee, and a decrease in the distressed sales/total sales ratio, it appears that the market for homes in this price range is stabilizing. The key statistic to look at in this price range though is the distressed sales/total sales ratio. If this ratio continues to decline, than it would be safe to assume that the market for homes in this price range will continue to improve. However, if we see a surge of distressed properties hit the market, than homes in this price range could continue to lose value.

Year over year market statistics for the $250,001-$450,000 price range.

Northeast Tallahassee

• 19% decrease in the number of properties listed for sale (128)


• 29.3% decrease in the number of properties sold (65)


• 1.1% increase in sales price ($326,304)


• 0.33% increase in the average sale price to list price ratio (95.92%)


• 2 day increase in the average amount of time it took to sell a home (125)


• 2.5% decrease in distressed sales/total sales ratio (6.2%)

Northwest Tallahassee

• 16,7% increase in the number of properties listed for sale (16)


• 60% decrease in the number of properties sold (4)


• 13.5 increase in the average sales price ($343,462)


• 0.15% increase in the average sale price to list price ratio (93.40%)


• 57 day decrease in the overall average time it took to sell a home (105)


• There were no distressed sales in either 2010 or 2011

Southeast Tallahassee

• 10% decrease in the number of properties listed for sale (27)


• 53.8% increase in the number of properties sold (20)


• The average sale price increased by $20 (so essentially there was no change in average sales price) ($321,729)


• 0.15% increase in the in the average sale price to list price ratio (98.12%)


• 10.4% decrease distressed sales/total sales ratio (5%)

Southwest Tallahassee

• 33.3% decrease in the number of properties listed for sale (4)


• 100% increase in the number of properties sold (1)


• The one property that sold, sold for $260,000


• The property that sold took 40 days to sell


• No change in the number proportion of distressed sales compared to total sales.

Summary of the $250,001-$450,000 price range

For homes in this price range, the market statistics are a little bit more of a mixed bag when compared to the two price ranges below it. In all areas of Tallahassee except for Northwest Tallahassee, we saw a decrease in the number of properties listed for sale. In the northeast and northwest parts of Tallahassee, we saw a decrease in the number of properties that sold in this price range. In the southeast and southwest, we saw an increase in the number of properties sold. The best news about the market for homes in this price range is that prices are increasing overall. Also, the distressed sales/total sales ratio has decreased in this price range. Chances are that there is a correlation between between the decrease in the distressed sales/total sales ratio and the increase in sales prices of homes in this price range. The decrease in the distressed sales/total sales ratio has created an environment in this price range where home prices are able to start going up again.

Another sign that the market for homes in this price is improving is that the average sale price/list price ratio of homes in this price range increased. This means that the market for homes in this price range is shifting in the direction of a seller's market where sellers have gained more negotiating power from a year ago.

In the northeast and southeast parts of Tallahassee we have seen an increase in the average number of days it takes to sell a property. In northwest Tallahassee we saw a sharp decrease in the average number of days it took to sell a property.

Most of the market statistics for homes in this price range varied from one area of Tallahassee to the next. However, the statistics that are the same for in all areas of Tallahassee for homes in this price range is the average sales prices and the distressed sales/total sales ratio. In all areas of Tallahassee in this price range, it appears that prices are stabilizing or increasing. Also, in all areas of Tallahassee, the distressed sales/total sales ratio is decreasing. These two statistics alone show that the market for homes in this price range is improving.

Again, in this price range the key statistic to watch is the distressed sales/total sales ratio. If this ratio increases, than home prices could fall again. However, if this ratio continues to fall, it is likely that we will see sustained improvement in the market for homes in this price range.

Year over year market statistics for the $450,001-$750,000 price range

Northeast Tallahassee

• 25% decrease in the number of properties listed for sale (30)


• 21.4% decrease in the number of properties sold (11)


• 1.8% increase in the average sales price ($572,500)


• 0.69% increase in the average sale price to list price ratio (93.55%)


• 28 day increase in the average time it took to sell a property (176 days)


• 7.1% increase in distressed sales/total sales ratio. (27.3%)

Northwest Tallahassee

• 50% decrease in the number of properties listed for sale. (1)


• no change in number of properties sold. Only 1 property sold in each year.


• In the last trimester of 2011 the property sold for $476,000 compared to $700,000 in the same time period in 2010


• 85 day decrease in the number of days it took to sell a property in this price range (47 days)


• 2.93% increase in the sale price/list price ratio (96.26%)


• no change in the distressed sales/total sales ratio. (0%)

Southeast Tallahassee

• 75% increase in the number of properties listed for sale (7)


• 150% increase in the number of properties sold (5)


• 16.6% decrease in the average sales price ($516,900)


• 2.63% increase in the average sale price/list price ratio (98.76%)


• 79 day increase in the average time it took to sell a property (112 days)


• 33.3% increase in the distressed sale/total sales ratio. ( 33.3%)

Southwest Tallahassee

• 200% decrease in the number of properties listed for sale (0)


• No sales activity

Summary of the $450,001-$750,000 price range

In this price range, there was an overall decrease in the number of properties listed for sale. The only exception to this was in the southeast quadrant of Tallahassee, where we actually saw an increase in the number of properties listed for sale. The vast majority of sales in this price range occured in the northeast quadrant of Tallahassee. We saw a fairly sharp drop in the number of properties sold in northeast Tallahassee in this price range. The likely cause of this is that declining prices caused many properties to drop below the $450,000 mark and into the lower price range. In the southeast quadrant of Tallahassee, property sales increased, and in the northwest and southwest quadrant there was change in sales activity.

The average sales price increased in the northeast area of town. The northwest and southwest parts of town saw price declines. The overall sale price to list price ratio increased in all areas where there was sales activity. A likely cause of the increase in the sale price to list price ratio is the fact that there was a fewer number of homes for sale in this price range in 2011 compared to 2010. This means that buyers have a fewer number of properties to choose from which gives seller's more negotiating power thus driving up the sale price/list price ratio.

There was an overall increase distressed sales/total sales ratio. The northeast and southeast saw an increase in the average number of days it took to sell a property, while the northwest part of town saw a decline in the average number of days it took to sell a property.

The vast majority of sales in this price range took place on the northeast side of town. With the reduction of inventory, the increase in the average sale price, and the increase in the average sale price/list price ratio, it appears the market for homes in the price range on the northeast side of town is getting better. It appears that the market for homes in this price range in the southeast and northwest sides of town is getting worse though. This is probably because there is not as much demand for housing in this price range in those areas. There was no sales activity in the southwest part of town in this price range

Year over year market statistics for the $750,001+ price range

Northeast Tallahassee

• 9% increase in the number of properties listed for sale (12)


• 100% increase in the number of properties sold (2)


• 31.7% increase in the average sales price ($1,100,000)


• 19.57% decrease in the average sale price/list price ratio (75.86%)


• 591 day increase in the average time it took to sell a house (917)


• 50% decrease in the distressed sales/total sales ratio. (0%)

Northwest Tallahassee

• 100% decrease in the number of properties listed for sale. (0)


• No sales activity

Southeast Tallahassee

• 300% increase in the number of properties listed for sale (3)


• 100 % increase in the number of properties sold (1)


• Sale price of sold property was $825,000


• The property that sold sat on the market for 31 days before it sold


• The property that sold was a distressed sale

Southwest Tallahassee

• 100% decrease in the number of properties listed for sale (0)


• No sales activity.

Summary of the $750,001+ price range

Sales activity was very limited in this price range. There were only 3 properties total that sold in this price range in all of Leon County in the last 4 months of 2011. Two of these sales occured on the northeast side of town, and one of these sales occured on the southeast side of town.

Although sales and listing activity was low for homes in this price range, we did see an increase in both the number of properties sold and properties listed for sale from a year earlier. The distressed sales/total sales ratio stayed about the same. The average sales price increased in this price range, and the number of days it took on average to sell a home in this price range increased.

With such limited activity in this price range, it is hard to make any assumptions about the overall market for homes in this price range.

Got Cash? Why purchasing a condo in Florida might be a very wise investment for you.

Real estate in Florida certainly has taken a beating over the past half of a decade. There is no doubt about this. We have seen prices dip as much as 30%-50% (depending on the specific area) since the peak in 2006. Out of all of the real estate in Florida though, condos have probably been hit the hardest. Before the real estate market tanked a few years ago, financing for purchasing a piece of property was much easier to obtain than it is now. Whether you were looking to purchase a townhome, a detached single family home or a condo, if you could fog a mirror, you could probably get a mortgage.

Well in today's market if you are looking to buy a single family detached home or a townhouse, financing is not as easy to come by. Your credit score must be stellar, you must be able to document a couple years worth of income from steady employment, and you must have an adequate downpayment. However, while it may be tough to get financing for a townhome or a detached single family home, you can still get financing. When it comes to condos in Florida though....financing is pretty much non existent

A few years ago, Fannie Mae, Freddie Mac (which alone currently account for purchasing about 90% of home loans made) and other companies in the secondary mortgage market stopped buying condo loans in Florida. The secondary mortgage market consists of companies that buy mortgages from lenders who originate mortgages. If companies in the secondary mortgage market stop buying condo loans in Florida, that means that lenders in Florida who originate the condo loans will have no one to sell those loans to. This would mean that lenders who originate the loans would have to keep those loans that they created. Well, the vast majority of lenders won't make a home loan if they can't sell that loan to a lender in the secondary mortgage market. It's simply too much risk. For this reason, home loans for condos in Florida are very hard to come by.

There are two exceptions to this. If the condo community is approved by the Federal Housing Association (FHA) than you can get an FHA backed home loan on a condo. Only owner occupants can get FHA loans though, and there are not that many FHA condo approved communities out there. If you are buying the property as an investment, you can't get an FHA loan no matter what. The other exception is if a lender is willing to make a loan on a condo in Florida and keep the loan on their books. This type of loan is called a portfolio loan. It's given that name because the lender keeps the loan in it's own "portfolio." If a lender will do a portfolio loan for a condo in Florida, than they will usually charge a higher interest rate than normal so they are compensated for the extra risk that comes with keeping the loan on their books. The number of banks who will do a portfolio loan on a condo in Florida though are very far and few between. For example, in my own town of Tallahassee, I only knew of 1 lender who would do a portfolio loan, and they have now stopped doing the portfolio loans.

Even with the availability of FHA backed loans on condos in approved communities and portfolio loans, it's safe to say that loans on condo's in Florida are pretty much extinct like the dinosaurs. So while this is unfortunate to most would-be buyers out there, this situation creates a great opportunity for some. Enter the cash buyer!

For the cash buyer this situation creates a great opportunity to make some money. Let's think about this for a second. Without the availability of home loans to purchase condos in Florida, the pool of buyers available to purchase these condos goes way down. This means that demand goes way down. When demand goes way down, prices go down as well. The only person that can buy these condos are people who can purchase them out right with cold-hard cash, and there are not too many people out there who have that much cash. So this means that these people that do have the available cash can snatch these condos up for bargain basement prices.

While the prices of condos in Florida may have declined more than say a townhouse, the amount of money you can get for rent has not declined more than what you can rent a townhouse for. Example, let's say you have two properties. Both properties are 1200 square feet, are built in 2000, have 3 bedrooms and 3 bathrooms and are in a similar area. One property is a townhouse and the other is a condo. The townhouse might sell for $80,000 and rent for $1000. The condo will also rent for $1000 a month, but it will only sell for $60,000. This means that you will make a better return on your money if you purchase the the condo.

These two properties are the same pretty much except for the fact that one is a condo and the other is a townhouse. The renter does not care whether it's a condo or a townhouse. The renter cares about things like how many bedrooms and bathrooms the property has, the location of the property and the condition of the property. For this reason, both properties will command the same rent. However, there is a larger pool of buyers to purchase the townhome as an investment property, so this higher demand drives the price of the townhouse up. Only people with enough cash to purchase the condo out right can purchase the condo, so this decreases the size of available buyers, decreases demand, and decreases the price. For the cash buyer, this also increases his return on his investment.

I know what some of you are saying right now. "Well condos have high monthly association fees that decrease return." This may be true, but it's been my experience that the increased return that you get from the reduction in price due to the fact that the property is a condo more than offsets the decrease in return that you experience from paying the monthly condo fee. Plus, you do get something for the monthly condo fee that you pay. The condo fee will usually pay for insurance on the exterior of the building, so your monthly homeonwers insurance will cost you less on a condo than if you were to buy a townhouse or a single family home because the coverage you would have to purchase would not have to cover as much with a condo. Also, the condo association usually takes care of things like maintaining the grounds, maintaining the exterior of the building, and they usually will have a termite bond on the property. So the condo fee that you pay monthly is offset somewhat because you don't have to spend as much money on the items just mentioned.

Here is another thing to consider about purchasing condos that most people don't consider. Currently Fannie Mae, Freddie Mac and other companies in the secondary mortgage market are not purchasing condo loans in Florida. However, do you think this will be the case forever? I don't think so my friend. Once the real estate market starts picking up again, these companies in the secondary mortgage market will most likely start purchasing condo loans in Florida again as well. Here is why.

These companies in the secondary mortgage market stopped purchasing condos in Florida because they viewed condos in Florida as a risky investment. The reason they viewed them as a risky investment is because (mostly in South Florida) during the real estate boom people payed way too much money for these condos. Once these people realized they could not afford these properties they stopped paying their mortgages and also stopped paying their condo dues. When people stopped paying their condo dues, the condo associations lost money. When the condo associations lost money, they could not properly maintain the condo community the way they were suppose to . When they could not maintain the condo community the way they were suppose to, the condos in the community began to lose value as a result. When the lenders in the secondary mortgage market realized this was happening in a very large scale in Florida, they said "Well looks like we made a bad decision with buying all those condo loans in Florida. They are losing value as we speak, so we better not buy anymore of those condo loans. They are way too risky." BOOM! Just like that, no more condo loans in Florida.

However, what is happening now is that people with cash are coming in and buying these condos up for dirt cheap, and these new owners can afford to pay their condo dues since they got such a good deal on the property. Now condo associations are starting to collect more and more dues in these condo communities which means that they will be able to start properly maintaining the communities again. Once companies in the secondary mortgage market realize this is happening, they will no longer view condos in Florida as a risky investment, and they will start buying condo loans in Florida again. How long will this take? I don't know. It could be 2 years, it could be 4 years, it could be 5 years. It will happen though. When it does, this will be more good news for the investor who purchased their condo in Florida with cash.

When people can get financing for condos again this will increase the buyer pool for condos in Florida, it will drive up demand for condos, and it will drive up the prices. This means the cash buyer's condo increase in value. So now not only is the cash buyer getting a good cash flow return from the rental income, but they are also increasing their return since the property value has appreciated.

So there you have it. If you have a bunch of cash available that you want to invest into real estate, think about purchasing a condo here in Florida. You'll make a great cash flow return from your rental income, and when companies in the secondary mortgage market start purchasing condo loans in Florida again, your property will most likely appreciate a lot in value.

If you have any questions about condos, if you are interested in purchasing a condo, or if you just have any general real estate related questions, please don't hesitate to contact me.

Bobby Nahoom
Amac Real Estate Company
(850) 567-0037
nahoom1171@yahoo.com
http://www.bobbynahoom.com/

Tallahassee Real Estate Market Update: 05/01/2011-08/31/2011

Today I will be giving you an update on the current condition of Tallahassee's real estate market. Once again I have taken the liberty of doing some research, and using the Tallahassee Board of Realtors MLS statistics, I have pulled and analyzed some very useful data that I will be using here today to give you an idea of how Tallahassee's residential real estate market is doing. In my research I made year to year comparisons covering and comparing the time periods of May 1st 2010 through August 31st 2010 to May 1st 2011 through August 31st 2011. To make my data as meaningful as possible, I divided propeties by both price range and location. I divided the properties up into 5 different price ranges and 4 different areas of town. In my research I looked up the number of homes listed during those time periods, the number of homes sold in those time periods, the average sale price of the homes that sold in those time periods, the average number of days it took for a home to sell in those time periods, and the sale price to list price ratio (this is the average % of what a home sold for compared to what it was listed for sale at). I pulled all this data for all properties in each price range and each area of town. Below is a summary of the data that I found categorized by price range and for Tallahassee as a whole.





Year Over Year Market Statistics for Tallahassee As A Whole.

• 23% decrease in the number of homes listed for sale. (1,534)




• 5.9% decrease in the number of homes sold. (918)




• .3% increase in the average price of a home




• .31% decrease in the average sale price to list price ratio




• 17 day increase in the time it took to sell a home (146 days)

To sum up the state of Tallahassee's overall real estate market, I would say that our local real estate market has bottomed out and is going up in value and recovering very slowly. The worst of times for our local real estate market appears to be behind us though. The number of homes actively listed for sale has decreased by a very large margin. This is important, because the supply of homes for sale has to come down to normal levels before we will see home prices start to increase again. Also, home prices overall in Tallahassee are up. Even though prices have only risen by a very small amount, they have still risen. The number of properties sold did decrease by a small amount, but the number of homes sold compared to the number of properties listed for sale as a percentage increased by over 10%.

With home prices going up over last year, it appears that prices are going up again. I would say that to be safe though, we need to see prices continue to consistently go up year over year in order to be certain that our real estate market here in Tallahassee is completely out of the hole.

The average sale price to list price ratio has decreased very slightly from last year, but I don't think its gone down by a large enough percentage to say that buyers have any more power in the market than they did last year. In fact, they might have less power due to the fact that there are not nearly as many properties to choose from this year as there were last year.

Finally, the average number of days that it took to sell a property in Tallahassee has increased. However, I don't think this is indicative of a softening real estate market. I think this is due to the fact that foreclosure sales are taking longer to close than they were last year. With foreclosure sales taking up a large percentage of the overall sales in Tallahassee, these sales have increased the overall average time period it takes to close on a home in Tallahassee.

I just mentioned above the overall average trend for Tallahassee's real estate market as a whole. However, within certain price ranges and in certain areas of Tallahassee, there are deviations to this overall average trend. As you will see in the statistics below, there are some areas of Tallahassee where sales are up, prices are down, ect... To see the specific statistics for different price ranges and different areas, continue reading.

$0-$125,000 price range

Northeast Tallahassee

• 40.5% decrease in the number of homes listed for sale




• 10.3% increase in the number of properties sold.




• .8% decrease in the average sale price




• 242 day decrease in the average number of days it took to sell a home (168 days)




• 3.16% decrease in the average sale price to list price ratio (91.53%)

Northwest Tallahassee

• 22.5% decrease in the amount of properties listed for sale




• 7.6% increase in the number of properties sold




• 9.4% decrease in the average sale price




• 65 day increase in the average amount of time it took to sell a home (158 days)




• .66% decrease in the average sale price to list price ratio (93.16%)

Southeast Tallahassee

• 28.6% decrease in the number of properties listed for sale




• 30.7% increase in the number of properties sold




• 8.3% decrease in the average price of a property sold




• 32 day increase in the average time it took to sell a property (150 days)




• .49% decrease in the average sale price to list price ratio (92.93%)

Southwest Tallahassee

• 35.9% decrease in the number of properties listed for sale




• 16.1% decrease in the number of properties sold




• 16.2% decrease in the average sale price




• 1 day increase in the average amount of time it takes to sell a property (118 days)




• 4.57% decrease in the average sale price to list price ratio (93.42%)

Summary of the $0-$125,000 price range

Overall this price range is marked by a very large decrease in the number of properties listed for sale along with a modest overall increase in the number of properties sold. The southwest part of Tallahassee is the only area that has deviated from this trend. There was a decrease in the number of properties sold on that side of town. All areas of town except for the northeast side of town saw an increase in the average amount of time it took to sell a property. There was a decrease in the average sale price to list price ratio for all areas in this price range. Finally, all areas showed decreases in the average price that a property sold for.

Declining prices, a declining sale price to list price ratio, and an increase in the average amount of time it takes to sell a home all indicate that we are in a weak real estate market (a buyer's real estate market). However, the decreased number of properties available for sale and the increased number of properties sold, indicate that the market for homes in this price range is at least recovering and is better off than last year. It will take some time though for the market for homes in this price range to completely recover though.

$125,001-$250,000 price range

Northeast Tallahassee

• 13.96% decrease in the number of properties listed for sale




• 7.8% decrease in the number of properties sold




• 2.3% increase in the average sales price




• 35 day increase in the average amount of time it took to sell a property (139 days)




• .21% increase in the average sale price to list price ratio (96.56%)

Northwest Tallahassee

• 33.15% decrease in the number of properties listed for sale




• 24.4 % decrease in the number of properties sold




• 1.4 % increase in the average sale price




• 37 day increase in the average amount of time it took to sell a home (104 days)




• 1.6% decrease in the average sale price/list price ratio (96.35%)

Southeast Tallahassee

• 36.3% decrease in the number of properties listed for sale




• 43% decrease in the number of properties sold




• 1.7 increase in the average sales price




• 24 day increase in the number of days it took to sell a home




• 1.55% decrease in the average sale price to list price ratio

Southwest Tallahassee

• 32.4% decrease in the number of properties listed for sale




• 65% decrease in the number of properties sold




• 6.8% decrease in the price of the average property sold




• 286 day increase in the number of days it took to sell a home




• 6.63% decrease in the average sale price to list price ratio

Summary of the $125,001-$250,000 price range

Overall it seems that home sales in this price range are struggling compared to sales during the same time period in 2010. Property sales have decreased overall by a fairly large amount in this price range. Also, it is taking longer to sell properties in this price range than it did last year. With the exception of the northeast side of town, the average sale price to list price ratio has decreased indicating that people purchasing homes in this price range have more negotiating power compared to last year.

One positive thing that is happening with homes in this price range though is that prices are increasing. The exception is homes on the southwest side of town. Another positive thing about homes in this price range is that the number of properties listed for sale has decreased. With increasing prices and decreasing housing inventory, it looks like the market for homes in this price range is improving.

$250,001-$450,000 price range

Northeast Tallahassee

• 16.2% decrease in listings


• 8.9% increase in the number of properties sold


• 5% increase in the average sales price


• 1.03% decrease in the average list price to sale price ratio (95.22%)


• 7 day increase in the amount of days it took to sell an average home (121 days)

Northwest Tallahassee

• 17.24% decrease in the number of properties listed for sale


• 11.1% decrease in the number of properties sold


• 8.6% increase in the average price of a home sold


• 4.03% decrease in the average sale price to list price ratio (91.3%)


• 42 day increase in the average number of days it took to sell a home (220 days)

Southeast Tallahassee

• 26.7% decrease in the number of properties listed for sale


• 8.7% decrease in the number of properties sold


• 1% decrease in the average sales price


• .95% decrease in the average sale price to list price ratio (95.8%)


• 25 day increase in the average number of days it took to sell a home (100 days)

Southwest Tallahassee

• The number of properties listed for sale increased from 5 in 2010 to 9 in 2011.


• The number of properties sold stayed constant at 1


• The average sale price dropped from $375K in 2010 to $280K in 2011. (Keep in mind only 1 property sold each year)


• 6.5% increase in the average sale price to list price ratio (86.15%)


• 107 day increase in the average amount of time it took to sell a home (231 days)

Summary of the $250,001-$450,000 price range

It should be noted that the majority of sales and listings in this price range took place on the northeast side of Tallahassee. With the exception of the southwest side of Tallahassee, the number of properties listed for sale in this price range dropped sharply. On the northeast side of town we saw a small increase in the number of properties sold, and in other areas of town sales decreased or stayed the same. Homes in this price range saw a small increase in the average sales price. There was a decrease in the average sales price of homes on the southwest and the southeast side of town, but these two areas only accounted for a very small percentage of the total homes sold in this price range. The average sale price to list price ratio of homes in this price range declined. This does not appear to be due to a softening of the market for homes in this price range though. This appears to be due to the fact that people are listing their homes for a higher price. Finally, it is taking more days on average to sell a home in this price range as opposed a year earlier, but this is likely due to people increasing the listing price of their homes in this price range.

With properties values up, sales up on the northeast side of town (which accounts for most sales in this price range), and a decrease in the number of properties available for sale, it appears that the market for homes in this price range is getting stronger.

$450,001-$750,000 price range

Northeast Tallahassee

• 7.5% increase in the number of properties listed for sale


• 5.9% increase in the number of properties sold


• 3.5% increase in the average sale price


• 1.35% decrease in the average sale price to list price ratio (95.58%)


• 21 day decrease in the average amount of time it took to sell a property (70 days)

Northwest Tallahassee

• Total properties listed for sale increased from 3 properties to 5 properties


• Total sales stayed the same at 2 properties


• The average sales priced decreased from $625,000 to $562,500


• The average sale price to list price ratio increased by 47% (98%)


• 13 day decrease in the number of days it took sell a home (25 days)

Southeast Tallahassee

• 44% increase in the number of properties listed for sale


• sales stayed the same at 3 properties


• 1.5% increase in the average sale price


• 10.04% decrease in the average sale price to list price ratio (95.58%)


• 56 day increase in the average amount of time it took to sell a home (70 days)

Southwest Tallahassee

• No activity

Summary of the $450,001-$750,000 price range

In this price range we saw an increase in the number of homes listed for sale, and in all areas home sales either increased or stayed the same. The southeast part of Tallahassee saw a small increase in the average sale price, but the southeast only accounted for a very small percentage of the number of homes in this price range. As a whole, homes in this price range decreased in value. The southeast side of town saw decrease in the number of days it took to sell a home on average, but the northeast and the northwest side of town, which accounted for the majority of sales in this price range, saw a decrease in the average number of days it took to sell a home. Finally, the average sale price to list price ratio decreased in this price range.

The number of properties sold increased in this price range. However, with declining sales prices and an increased number of homes available for sale, the market for homes in this price range does not appear to be getting better at this point.

$750,000+ price range

Northeast Tallahassee

• 36.4 % decrease in the number of properties listed for sale.


• 20% decrease in the number of properties sold


• 7.4% increase in the average sale price


• 8.92% increase in the average sale price to list price ratio (89.99%)


• 4 day decrease in the average amount of time it took to sell a home (209 days)

Northwest Tallahassee

• The number of properties listed for sale increased from 1 to 4 listings


• The number of properties sold increased from 0 to 1 listing


• The property sold for $825,000


• 100% sale price to list price ratio

Southeast Tallahassee

• Properties listed for sale increased from 0 to 1 listing


• Properties sold increased from 1 property to 2 properties


• 6.8% decrease in the average sales price


• 7.94% increase in the average sale price to list price ratio (93.37%)


• 146 day increase in the average time it took to sell a property (206 days)

Southwest Tallahassee

• No activity

Summary of the $750,000 price range

Sale prices and the number of properties listed for sale increased in this price range, the average number of days it took to sell a home decreased, the number of properties sold increased, and the average sale price to list price ratio of homes in this price range increased. These are all signs that the market for homes in Tallahassee priced $750,000 and up is getting better.

Yes it may be a good time to buy, but is it a good time to buy for you?

All over the place, in the media, from friends and family, on the internet, ect... all you hear about is how it is such a good time to buy real estate these days. With interest rates near historic lows and home prices as low as they have been in the last decade, yes it is true it is a good time to buy. However, is it a good time to buy for you? It might not be. If you give in to all the chatter about how it is a good time to buy and you purchase a home when you are not ready to do so, it could spell long term financial ruin for you. If you are thinking about buying a home, here are some things to consider.

First off, how stable is your employment? If you purchase a home, and you are layed off soon after that, how are you going to be able to afford your mortgage payments? This is something to think about, especially with the way that the economy is these days. If you buy a home, lose your job, than lose your home to foreclosure, that foreclosure could linger on your credit report and haunt you for 7 years.

Do you have an adequate emergency fund to hold you over in the event that you do lose your job or for some reason can't make your mortgage payments after you buy your home? Before you decide to purchase a home, it would be a good idea for you to have an emergency fund available that would enable you to pay your bills for 6-12 months without any income.

How long would you plan on living in the home if you plan on buying it? If you don't plan on being in the home for at least 3-5 years (probably closer to 5 years in this market) than you should probably not buy a home. If you live in the home for less time than that, you will probably end up losing money on the home. In addition to the purchase price of the home, there are other expenses associated when you purchase a home. There are also expense as well as when you sell the home. When you purchase the home you have buyer's closing costs that you have to pay for. When you sell the home you have seller's closing costs that you have to pay for. The home will need to appreciate by at least as much as those closing costs in order for you to break even. Home prices are at best bottoming out right now in most markets, so it could very well be 5 years before your home appreciates enough to break even.

Are you able to qualify for the best interest rate on a home loan right now? When you go to get a home loan, the interest rate that you get on your home loan will depend on a few factors. Among those factors are your credit score, how high are your expenses comparted to your income (debt to income ratio), and the total value of all the assets you own. If you have a good credit score, your expenses are not too high compared to your income, and/or you have an adequate amount of assets, than the lender will usually give you the best interest rate available. It may not seem like very much, but even just a one half of one percent increase in your interest rate can cost you big bucks in the long run. To illustrate, let's compare a $150,000 30 year fixed rate loan at a 5% interest rate compared to the same 30 year fixed rate loan with a 4.5% interest rate. With the 4.5% interest rate you will have paid $427,154.71. With the 5% interest rate, you will have paid $520,161.65 at the end of the 30 year period. As you see that additional .5% in the interest rate will cost you an additional $93,006.94 over 30 years. That's money you could have stashed away for retirement. It might be beneficial for you to wait 6 months or a year to buy so you can work on improving your credit score as well make and save more money so that you can qualify for a better interest rate.

Have you factored in the hidden costs of homeownership? In addition to the mortgage payment, you have a list of other costs associated with homeownership as well. Some of these costs include property taxes, homeowners insurance, homeowners association fees if you live in a certain community that charges those fees, regular maintenance and upkeep of the home, and misc. and unforeseen repairs. These other expenses can add up. They can especially add up if you have some big ticket items that you have to spend money on such as a new roof or a new A/C system. Yet it is true that in the long run homeownership is a good investment and is better than renting. However, you usually have to live in the home for a long enough period of time before you can recognize the saving that homeownership has over renting.

Have you evaluated why you are buying and made sure it is for a good reason? Sometimes people buy homes for the wrong reasons. For instance buying a home you really can't afford so that you project a certain level of status. This is a bad idea, and it will probably end up making you house poor. Worst case, you could end up not affording your payments and you could get foreclosed on. Another good example is someone buying an investment property, and they are counting on a certain level of appreciatiation in order to acheive a certain level of return. In this market this would be a bad idea. In this market it is best to count on achieving a certain level of return on a property from rental income and not from estimated appreciation in the value of the home. Of course this is because no one knows how much (if any) homes will appreciate in the next few years. So when you are buying a home, make sure it is for the right reasons.

Homeownership provides a lot of benefits. There is something very nice about living in a place that is your's and not someone else's. Homeownership provides community stability, and it is proven that children of parents who own their homes usually do better in school and are less likely to become teen parents. Homeownership is a great thing. Just make sure that it is the right time for you to become a homeowner.

2011 Tallahassee Real Estate Market Update Part 1

Today I will be giving you an update on the current condition of Tallahassee's real estate market. Once again I have taken the liberty of doing some research, and using the Tallahassee Board of Realtors MLS statistics, I have pulled and analyzed some very useful data that I will be using here today to give you an idea of how Tallahassee's residential real estate market is doing. In my research I made year to year comparisons covering and comparing the time periods of January 1st 2010-April 30th 2010 to January 1st 2011-April 30th 2011. To make my data as meaningful as possible, I divided propeties by both price range and location. I divided the properties up into 5 different price ranges and 4 different areas of town. In my research I looked up the number of homes listed during those time periods, the number of homes sold in those time periods, the average sale price of the homes that sold in those time periods, the average number of days it took for a home to sell in those time periods, and the sale price to list price ratio (this is the average % of what a home sold for compared to what it was listed for sale at). I pulled all this data for all properties in each price range and each area of town. Below is a summary of the data that I found categorized by price range and for Tallahassee as a whole.


YEAR OVER YEAR MARKET STATISTICS FOR TALLAHASSEE AS A WHOLE


26.6% decrease in number of homes listed for sale (2,233 homes listed)

5.5% increase in number of homes sold (955 homes sold)

9.7% decrease in average sale price of a home ($153,743)

2.26% decrease in sale to list price ratio (93.33%)

17 day increase in the average amount of time it takes to sell a home (158 days)

Overall, the Tallahassee real estate market appears to be headed in the right direction toward recovery, but it is clear that we have not hit the bottom. The amount of properties listed for sale has sharply decreased in the last year, and at the same time we have experienced an overall increase in sales. This is clearly a good sign. A decrease in our housing inventory and the increase in sales is exactly what we need to happen in order for home prices to stabilize and begin to increase again. This is basic economics. You decrease supply and increase demand, and eventually prices will rise. However, we still are not quite at that point where the change of supply and demand has been dramitic enough for prices to stablilize yet. The over supply of homes coupled with the downward pressure on prices from foreclosures and short sales has caused prices to continue to fall.


In addition to this, the overall sale to list price ratio has dropped by 2.36% over the past year. The sale to list price ratio is what the average house sells at compared to what it was listed for sale at. For instance, if a house is listed for sale at $100,000 and it sells for $95,000, the sale to list price ratio for that home is 95%. A high sale to list price ratio is a sign of a strong and healthy real estate market (a seller's market). A low sale to list price ratio is a sign of a weak real estate market (a buyer's market).


Finally, it appears that the average amount of days that it took to sell a house that sold in this time period increased in from last year. Typically, the longer the average time period it takes to sell a home, the weaker the housing market.


As you will see from the specific statistics on our local housing market below, in certain price ranges in certain areas of town, prices are actually stabilizing or even increasing slightly, so it's not all bad news. Most of the decrease in our housing market is occuring in the lower priced properties and in the highest priced properties. The market for mid-range priced homes, especially in northeast Tallahassee, seems to be a more stable and healthy than the Tallahassee real estate market as a whole.



The $0-$125,000 Price Range.


Northeast Tallahassee


9.1% increase in the number of houses listed for sale

12% decreases in the number of homes sold.

2.8% decrease in the average sale price

45 day increase in average time it took to sell a home (155 days)

5.92 % decrease in the average sale price to list price ratio (90.2%)

Northwest Tallahassee (The college side of town)



29.3% decrease in the number of properties listed for sale

7.5% increase in the number of properties sold

18.6% decrease in the average sale price

2.3% decrease in the average sale price to list price ratio (93.8%)

14 day increase in the average amount of time it took for property to sell (151 days)

Southeast Tallahassee



16.1% decrease in the amount of properties listed for sale

62.7% increase in the number of properties sold

20.4% decrease in the average sales price

2.3% decrease in the average sale price to list price ratio (91.52%)

27 day increase in the average amount of days it took for a property to sell (129 days)

Southwest Tallahassee



4.7% decrease in the amount of properties listed for sale.

97% increase in the amount of properties sold

24.2% decrease in the average sales price

6.15% decrease in the average sale price to list price ratio (87.35%)

76 day increase in the average amount of days it took for a property to sell (165 days)

Summary of the $0-$125,000 price range


Overall in the price range, the number of properties listed for sale decreased dramatically, and the number of properties sold has increased dramatically. The increase in sales has seemed to be caused by the steep decrease in the average sales price of homes in this price range. Home prices have faced extreme downward pressure from the abundance of distressed sales in this price range. The average amount of days it took to sell a home in this price range increased and the average sale price to list price ratio has decreased which indicates that this price range is becoming more of a buyer's market.


The area of town that was the exception to the general trend for this price range was the northeast part of Tallahassee. The market in the northeast seemed to be much more stable with prices not dropping as much as in other areas of town. Also, sales went down and the number of properties listed for sale went up as well which are both the opposite of what happenend on all other three areas of Tallahassee.



The $125,001-$250,000 price range.


Northeast Tallahassee


17.9% decrease in the number of properties listed for sale

5.35% decrease in the number of properties sold

1.1% increase in the average sales price

.3% increase in the average sale price/list price ratio (96.29%)

10 day decrease in the average number of days in took a home to sell (139 days)

Northwest Tallahassee


48.7% decrease in the number of properties listed for sale

45.2% decrease in the number of properties sold

2.9% increase in the average sales price

.44% decrease in the average sale price to list price ratio (96.84%)

15 day increase in the average amount of days it took a home to sell (156 days)

Southeast Tallahassee

43.6% decrease in the number of properties listed for sale

30.7% decrease in the number of properties sold

2.5% increase in the average sales price

1.43% decrease in the average sale price to list price ratio (96.06%)

7 day decrease in the average days in took to sell a home (121 days)

Southwest Tallahassee


62% decrease in the number of properties listed for sale

69% decrease in the number of properties sold

1.67% decrease in the average sales price

.62% decrease in the average sale price to list price ratio. (98.73%)

302 day increase in the average amount of time it took to sell a home (405 days)

Summary of the $125,001-$250,000 price range


Overall this price range of homes was marked by price stability. Prices increased very slightly in the northeast, northwest, and southeast parts of Tallahassee while decreasing slightly in the southwest part of Tallahassee. In this price range, both the number of properties listed for sale and the number of properties sold decreased pretty sharply which indicates that there was an overall decrease in buying and selling activity in this price range.

With the exception of the southwest part of Tallahassee, the average days it took to sell a property in this price range went down. This probably has to do with the fact that the amount of homes to choose from in this price range that are for sale has decreased.

The average sale price to list price ratio alse decreased very slightly in the price range which means that overall the market for homes in this price range has very slightly shifted to more of a buyer's market


The $250,001-$450,000 price range


Northeast Tallahassee


16.78% decrease in the number of properties listed for sale

30.7% decrease in the number of properties sold

3.5% increase in the average sales price

.38% increase in the average sale price to list price ratio (96.19%)

18 day increase in the average number of days it took for a property to sell. (151 days)

Northwest Tallahassee


29.2% decrease in the number of properties listed for sale

60% increase in the number of properties sold

.6% increase in the average sales price

4.08% increase in the average sale price to list price ratio

74 day increase in the average number of days it took to sell a property. (203 days)

Southeast Tallahassee


29.8% decrease in the number of properties listed for sale

280% increase in the number of properties sold (from 5 sales in 2010 to 19 sales in 2011)

5.1% increase in the average sale price of a home

1.68% increase in the average sale price to list price ratio. (97.49%)

35 day increase in the average amount of time it took to sell a property. (110 days)

Southwest Tallahassee


9.1% decrease in the number of properties listed for sale

There were no sales in this price range in this area between Jan 1st 2011 and April 30th 2011 thus we have no sales data.

Summary of the $250,001-$450,000 pricerange



This price range has been marked by a decrease in the number of homes available for sale, an increase in the number of properties sold (with the exception of southwest Tallahassee, which had no sales in 2011), and a small increase in average sales price. The decrease the number of homes available for sale, the increase in the average sales price and the overall increase in the average sale price to list price ratio all are strong indicators that the housing market in this price range is improving. This market for homes in this price range seems to be shifting more towards the direction of a seller's market. However, while it is shifting in the direcition of a seller's market, it is still by large a buyer's market. Just less of a buyer's market compared to last year.


The only statistic in this price range that is not congruent with the rest of the data is the average days on the market. Overall the average days on the market to sell a home in this price range has increased from last year. However, this might not be caused by shift of supply and demand as one might assume. This could be caused by other factors such as lenders taking longer to process buyer's home loans. It could also have to do with foreclosure properties taking longer to close due to all of the recent problems banks have had with their foreclosure properties that they own.

The $450,000-$750,000 price range

Northeast Tallahassee

23.5% decrease in the number of properties listed for sale

The number of properties sold remained the same

3% increase in the average sales price

1% increase in the sale price to list price ratio

13 day decrease in the average number of days it takes to sell a home (165 days)

Northwest Tallahassee

14.2% decrease in the number of properties listed for sale.

The number of properties sold stayed the same

38.8% increase in the average sales price

13.52% decrease in the average sale price to list price ratio

55 day decrease in the number of properties listed for sale (282 days)

Southeast Tallahassee

66% increase in the number of properties listed for sale.

66 % increase in the number of properties sold

$914 increase in the average sale price

1.41% increase in the sale price to list price ratio

80 day increase in the average number of days it takes to sell a home 235 days

Southwest Tallahassee

There were no sales in 2010 or in 2011 for homes in this price range in SW Tallahassee

Summary of the $450,000-$750,000 price range

Overall, the number of properties listed for sale in this price range (with the vast majority of the properties being in the northeast part of Tallahassee) decreased in this price range. The exception was in Southeast Tallahassee where we saw an increase in the number of properties listed for sale. The exception was in the southeast, where we saw an increase in the number of properties listed for sale increase. The number of sales increased in 2011 while the average sales price stayed about the same.

In the NE and NW, days on the market decreased while average days on the market increased in the SE. Overall it appears that the market for homes in this price range has been very stable from 2010 until now. The relatively unchanged average sale price and the fact that the number of properties sold stayed about the same shows that this market is stabilizing. The fact that the number of properties listed for sale has decreased, and that the average time it has taken to sell a home in this price range has decreased from last year, shows that the market for homes in this price range in Tallahassee, might actually be improving.

The $750,001+ price range.

Northeast Tallahassee

7.3% increase in the number of properties listed for sale

Sales stayed the same

19.2% drop in the average price of a home

Sale price to list price ratio dropped by 13.22%

142 day drop in average days on the market (279 days)

Northwest Tallahassee

No activity

Southeast Tallahassee

No activity

Southwest Tallahassee

No activity

Summary of the $750,000 price range

Sales activity in this price range was very limited with only 2 sales occuring in this price range. Both sales were on the northeast side of Tallahassee. From the limited data we have in this price range, it appears that prices in this price range are dropping as well. The list to sale price ratio in this price range has fallen, indicating that buyers have more bargaining power in this price range. Days on the market to sell a property in this price range has decreased. This is most likely due to the fact that prices have dropped.

Bargain prices cause reduction of housing inventory for 2011!

Home prices have continued to drop this year to levels not seen in over a decade. This is happening locally and also around the country. This trend of prices dropping is obviously not new as this has been happening for the last few years now. However, what is new is that there are more buyers purchasing properties than we have seen for quite some time. It appears now that prices have dropped to a point where homebuyers have decided to jump off the fence and into homes.

The sharp increase in sales over the past year is causing an equally sharp decrease in the inventory of homes available for sale around the country. We are especially seeing a sharp decline of housing inventory in cities that have been hit the hardest by the foreclosure crisis. For example, in the last year Miami's housing inventory has declined by 24%, Detroit's housing inventory has dropped by 17%, and Phoenix's housing inventory has dropped by 10%. Many other major metropolitan areas have seen simalar declines in the amount of homes for sale as well.

This is good news for both the housing market and for our nation's economy as a whole. Many leading economists say that the decline of housing inventory, especially the decline short sale and foreclosure properties available for sale, is key step to the recovery of the housing market. The logic behind this is that as the supply of homes decreases, the competition among buyers for existing properties will increase thus driving up home prices again. Many real estate agents, including myself, and many buyers out there will make the argument that this is already happening.

Right now there are properties for sale that are great deals, and there are also properties that are not great deals, and there are properties that are somewhere in between. Many of the great deals out there are foreclosure properties and short sale properties. What i'm seeing out there is that the great deals are only on the market for a short period of time. Everybody is looking for a great deal right now, so when a great deal pops up for sale you usually have several offers on it within a few days after the property is initially put on the market. There is a large demand for the good deals right now. The cliche phrase i'm hearing from buyers these days is...you guessed it..."I'm looking for a great deal." As the inventory of these good deals is starting to dwindle, the competition is among buyers for these good deals is increasing. That is what I am seeing first hand.

As Mike Shannon, a real estate agent in Detroit, said "It’s like a feeding frenzy when a home goes on the market now,...We’re getting a few dozen offers on some homes in a matter of days.”

A lot of the people buying up these great deals are investors who are paying with cash. The banks are paying them very low interest for their cash deposits, so they are moving their cash from the bank into real estate where they can buy a property for cheap and rent it out earning a much better return on their money than their banks are paying them. In Tampa this past March, 35% of the homes that sold were bought and paid for with cash. In a normal market about 10% of home transactions are cash deals. With that being said, it looks like the cash paying investors out there are helping soak up the inventory of homes. And I digress: For this, we thank you cash paying investors for your contribution to our nation's housing and economic recovery! That's true capitalism at it's finest working before our eyes...and working a lot better than the government programs out there designed to help the housing market I might add.

Some economist warn that the worst may not be over though. Some economists are claiming that banks are still holding hundreds of thousands...maybe millions of foreclosure properties that they have not released onto the market yet. They say that the recent problems that banks and other financial institutions have had with foreclosures (i.e. not property foreclosing on properties, having to reforeclose on properties, clearing up title issues, ect...) have slowed down the bank's foreclosure process over the last few months, and the slowdown in the foreclosure process is the reason for the decline in the housing inventory across the country. The economists warn that when the banks start releasing the properties onto the market again at the pace they were before the foreclosure scandals and problems were uncovered, the inventory of properties will increase again, and prices will decline even further.

In conclusion, the bottom line is that many of the properties on the market today are distressed properties (short sales and foreclosure properties). Roughly about a third of the properties for sale are distressed properties. Our housing market and our economy will not recover until these properties are purchased and our housing inventory returns to normal levels. Right now it appears we are headed in that direction. If the economists who think that we are going to have another wave of foreclosure properties hit that market are correct, than this just means that the housing market and the economy is just going to take longer to recover. Of course, it also means that i'll have more distressed properties to sell before things are back on track...my own little contribution to the recovery of our housing market and the economy.

Know the Dynamics of Pricing When Shopping for Short Sales

If you are currently in the market to purchase a property, you can sometimes get a good deal if you buy a short sale property. However, as I learned a long time ago in basic economics 101, there are no free lunches. If you see a short sale property listed for sale at a price that is too good to be true, it probably is. For those of you who have been thinking about purchasing a short sale, I am going to give you some things to keep in mind when deciding whether or not to move forward with your purchase. Before that though, I am going to talk a little bit about what a short sale is and how they work. In a short sale, a homeowner negotiates a payoff amount with his or her lender to save the distressed property from foreclosure. The payoff amount the homeowner negotiates with the lender in a short sale is less than what the homeowner owes on the loan. A lender will usually agree to do a short sale because it saves the institution a considerable amount of time and expense associated with foreclosing on a property. As part of the short sale, the lender has to approve any offer that a buyer makes on the property. So how does the owner’s lender decide whether or not to accept an offer on a property? Once an offer is received, the lender will pay a third party broker, who is not involved with the transaction, to come look at the property, evaluate comparable properties, and give an estimate of value for the property. If the offer received is equal to or greater than the value the third-party broker assigned to the property, the owner’s lender will generally approve the offer. A lender generally won’t tell the homeowner, or any other party involved with the transaction, what price they will take for the property until they receive an offer and the offer is reviewed. This means that the listing agent must do his or her best job at determining the fair market value of the property and list the property for sale at that price in hopes that the lender will accept an offer at or near that price. Even if you make a full price offer on a short sale, there is no guaranty that your offer will be accepted. If the listing price can be supported by recent sales of comparable homes in the vicinity though, there should not be a problem with the lender accepting an offer that comes in at or near the listing price. However, sometimes short sale properties are not appropriately priced. I’ve seen real estate agents list short sale properties for outrageously cheap prices that are well below market value. This means that the property does not have any comparable sales to back up the listing price. If this situation occurs and someone makes an offer on the property at or below the already very cheap list price, the lender will usually reject the offer because it isn’t supported by comparable sales. When this happens, the buyer and everyone involved with the transaction ends of wasting a lot of time and effort. It can be as much as 90 days or longer before the seller’s lender responds to an offer on a short sale, so buyer’s can also miss other opportunities while waiting on the lender to respond to the offer. So as a buyer, if your offer is rejected by the lender, you’ve just wasted 90 days or however long it took for the lender to respond to your offer, and you still don’t have a home. This situation can usually be prevented. Before you make an offer on a short sale property, approach the listing agent or your own real estate agent, and ask them to provide you with at least 3 comparable sales from the same area or neighborhood that have sold within the last 6 months. Properties that have sold within the last 3 months would be even better. Also ask the agents to provide you with at least 3 comparable properties for sale in the same area or neighborhood. If the price that the property you are interested in buying is well below those of the comparable properties, the lender probably won’t approve an offer for that price it is listed at. This is because the list price is below market value, and the lender will assume they can get more money for the property. At this point it would be a good idea to ask the listing agent if the lender has pre-approved a short sale at the low price they have the property listed for. If they have, ask to see a copy of the approval letter from the lender to prove it. If the lender has not approved the short sale at the list price, you should probably make an offer that is supported by recent sales and comparable properties for sale, or you should move on and find another property. Otherwise, you are probably just wasting your time and effort.