Short Sell Your Home Before December 31st 2012 To Avoid Tax Liability.

When you are behind on and can't keep up with your mortgage payments, a short sale is an option that a homeowner has to avoid foreclosure.   Most people choose to do a short sale instead of being foreclosed on  because a short sale looks better on your credit report compared to a foreclosure.  Also, if you wanted to obtain a home loan again in the future, lenders will usually view having a short sale on your record more favorably as opposed to having a foreclosure on your record.  So what exactly is a short sale?

A short sale occurs when your lender agrees to release the lien on your property for an amount of money that's less than what you owe them on the loan they originally gave you.  For example, let's say you bought your home 6 years ago for $400,000 and you took out a $350,000 mortgage on your home when you bought it. Currently your home is only worth $275,000.  You list  your home for sale and you get an offer on it for $275,000.  Your lender agrees to release the lien from your home for $275,000 so that you can sell your home.  This would be an example of a short sale.  However,  just because your lender agrees to release the lien from the home so you can sell the home does not necessarily  mean you would be off the hook for that $75,000 difference of what the lender received from the short sale and what you owed on your home loan..  The reason for this is that when you get a mortgage not only is your mortgage secured by the property, but you also sign a promissory note in which holds you personally responsible for paying back the loan.  When a lender agrees to release the lien from a property so you can sell it, that just means that they can't hold the property as collateral for your debt any more, but they still can hold you personally responsible for that debt because you signed a promissory note personally agreeing to pay back the loan.  The only time a person would not be liable to pay their lender for the deficient amount owed to the lender after the short sale is if the lender chooses to forgive the homeowner for that debt.  From my experience, lenders usually do forgive the homeowners for the deficient  amount of money still owed after the short sale.  This is probably because the lenders can write this off as a loss and get a tax break for doing so.  This is not always the case though, so if you are thinking about doing a short sale, it would be a good idea to ask your lender if they would forgive you for the entire amount of debt if you do a short sale.

So that's good news if you can do a short sale and your lender will just forgive you for your mortgage debt right?  I mean, in the example above that would mean you got off the hook for $75,000.  Right?  The answer to this is yes and no.  Yes, it's true in the case above that the homeowner would be off the hook from paying their lender $75,000.  However, while you don't have to pay your lender that $75,000, there is another party that you will have to pay out a large amount of money to if you are forgiven by your lender for this $75,000 debt.  Who is this other party that is spoiling your excitement from having just been forgiven for your $75,000 debt?  None other  than the beloved Internal Revenue Service.  Yes, it's the tax man who's going to want some money if you are forgiven for mortgage debt that you did not pay.

So why do I have to pay the I.R.S. money if my lender forgives me for my debt?  I will tell you why.  When you are forgiven the debt for a home loan you received, that forgiven debt is treated as income.  Using the example above, let's say you were forgiven for $75,000 of debt on a short sale that you completed.  That same year you earned $50,000 from your job. Now instead of paying taxes on $50,000, you will be paying taxes on $125,000!  While paying taxes on $75,000 is still better than paying the whole $75,000, it's still a bummer that you are going to be left with a hefty tax bill if you do a short sale.  What if I told you though that there is a way to get out of having to pay the I.R.S. on the forgiven amount of debt from a short sale?  Would you be excited?  Well, you should be excited because there is a way to get out of paying the I.R.S. on the forgiven debt from a short sale.

According to the Mortgage Forgiveness Debt Relief Act of 2007, if you do sell your home via a short sale agreement with your lender, you will be forgiven for the deficient amount of debt owed to the lender.  The property has to be your primary residence and you have to close on the property before December 31st 2012.  The exact reading from I.R.S. Publication 4681 states that "You can exclude cancelled debt from income if it is any mortgage you took out to buy, build, or substantially improve your main home.".  This means that any first mortgages you took out to purchase or build your home as well as any subsequent home loans that you received where you used the loan proceeds to improve your home can be forgiven.

You are probably asking yourself, "Well this is all good information, but what does this all mean?"   What it means is that if you have been thinking about doing a short sale, you better start the process very, very soon.  We have less than 5 months now before the Mortgage Forgiveness Debt Relief Act of 2007 expires.  Once you put your property on the market it's going to take some time to find a buyer even if you price the property aggressively.  Once you do find a buyer and they make an offer on your property, it could take months before you close on the property.  This is because the short sale process adds to the length of time it takes to close on a home.  Doing a short sale is a good option to choose if you are struggling to keep up with your mortgage payments and you want to avoid foreclosure.  If you know you want to do short sale and you want to avoid owing taxes to the I.R.S. on the forgiven debt arising from a short sale on your primary residence, you need to act soon.  Of course, before proceeding with a short sale I always advise to seek the council of an experienced real estate attorney, tax attorney and/or C.P.A. to be certain of the consequences of proceeding with a short sale.

I have plenty of experience with handling short sales, so if you have any questions about short sales, please feel free to contact me.  I would be glad to help you in anyway I can or answer any questions that you have.

3 Steps To A Smooth and Successful Homebuying Experience. Part 3

So today I will dive into the 3rd step in the 3 step process to having a smooth and successful home buying experience. Last week we talked about the importance of learning ahead of time as much as you can about the real estate market and the housing inventory in the area where you are looking to buy. The week before that we talked about the importance of meeting with a lender 3-6 months before you are planning to buy a home if you are planning to purchase your home using a home loan. Today we will be talking about the importance of learning about the actual homebuying process before you are ready to buy. When I say the homebuying process, I am talking about what happens between the time you find the property that is right for you all the way to the day you close on and take ownership of the property.

Meeting with the lender to find out about your financing options and learning about the real estate market where you are looking to buy is only the beginning. Once you find the right home, there is still a lot of ground to cover before you make it to the closing table. Before you are ready to make an offer on a property, you need to be educated about the homebuying process. You need to know what to expect between the time period you make an offer on the property all the way up to the closing. The better educated you are about this process, the more likely you will successfully making it to closing.

There are many things that happen during this time period that you need know about. Some of these things are as follows. Negotiating your offer is the first step. To successfully negotiate the terms of your offer, you need to have the right information. You need to know what similar properties have sold for recently as well as what similar properties are currently selling for. If possible, you need to have an idea of what the seller's motivation for selling is. You also need to know what is customary in your area with regards to who pays for certain closing expenses and make sure you are not paying for expenses you don't have to. For instance, in Tallahassee it is customary for the buyer to pay for owner's title insurance. However, in other areas in Florida it is customary for the seller to pay for this. If you are coming from a different area, you might be paying for something because it is customary in your area, but you should not be paying for it now because it's customary for the other party to pay for it in the current area you are in. Finally, you need to be educated on the dynamics of the real estate market where you are buying. Is this a buyer's market that is flooded with properties or are you in more of a seller's market where demand is high and supply is low? This will make a difference in how much negotiating power you have.

After you successfully negotiate the offer and you put the property under contract, now you have do your due diligence. You will need to order a home inspection, a wood destroying organisms inspection, and whatever other inspections you might think are needed. Other inspections might include a radon inspection, a lead based paint inspection, a mold inspection, a septic tank inspection, a well inspection, a structural engineering inspection if you have concern about possible foundation issues, ect...

In addition to ordering inspections, you will probably need to order a survey and appraisal as well. A survey is important because it tells you where the property's boundries are and may uncover easements or encroachments on the property that you did not know about. An appraisal is something the lender will make you order if are getting a home loan to buy a property. The appraisal will determine whether or not the value of the property is in line with what you are offering. In this day and age, it is common for appraisals to come up lower than what you offered on the property. This will leave you unable to get a home loan at the price you offered on the property unless the seller reduces the price or you come up with the cash to make up the difference between the contract price and the appraisal price. It's a good idea to prepare for this situation ahead of time, and consult with your REALTOR and have a game plan ahead of time in the event that the appraisal comes back low.

Finding a good attorney or title company to handle the closing of the property as well as to issue title insurance and perform a title search is also another important step to take when you are buying a property. The title search will uncover any liens, breaks in the chain of title or any other title issue which could cloud the title to the property you are buying. This is important because you don't want to buy a property and later find out that there is a $10,000 lien or some other title issue on the property that you are now stuck with. The title search should uncover any of these issues. However if title search happens to miss something, title insurance will fix the issue if something comes up later on that the title search did not catch. So that is why you need to have title insurance too.

In addition to title insurance you will need to find out about homeowner's insurance and flood insurance (if you are in a flood zone). As soon as you put the property under contract you need to find a reputable insurance agent and inquire about getting homeowner's insurance and flood insurance if it applies, and find out if the property you are buying is insurable and if so, how much your insurance will cost. Sometimes you might discover that your insurance costs for a certain home are going to be well above what you expected. The sooner you know this information the better.

In addition to the steps mentioned above, you will need to stay in close communication with your lender to make sure your loan is moving smoothly along in the underwriting process. Sometimes lenders will need additional documents from you in order to keep the file moving along in the underwriting process. Lenders sometimes have a lot of loans they are processing, so it could be days before they let you know they need something. For this reason, it would be a good idea for you to call your lender at least once a week once the property is under contract to make sure they have everything they need from you to keep the loan process moving foward.

Before closing, the last thing you need to do is a final walk through. The purpose of the final walk through is to make sure the property is in the same condition that it was when you made the offer. What would happen if the house was vacant and a tree fell on the house or if the toilet sprung a leak and flooded the house the day before closing( this really happened to a house a client of mine was buying). If the house was vacant, no one might know until after the closing at which time you will now be stuck with the issue. A walk though the day before closing can help you discover any possible issues like this if one arises thus allowing you time to let the seller know so he/she can fix the issue before closing.

These are the main things you need to do during the time period from when you find the right property up until you close. Each property is different though, so there might be other steps you need to take as well. For this reason, it's important to consult with your REALTOR ahead of time and find out as much as you can about the buying process before you make an offer on a property. This is especially true if you are buying a short sale or foreclosure property, as these properties present another complete set of unique potential issues and problems .

If your REALTOR has a homebuying packet or has any literature he/she can give you about the homebuying process, this would be good for you to have as well. If you want to learn more about the homebuying process, you can view my homebuyers packet that I give to my clients at http://www.bobbynahoom.com/106/--Home-Buyers-Packet

I hope you have enjoyed reading about my 3 step process to having a smooth and successful homebuying experience. If you have any questions or comments, please contact me at nahoom1171@yahoo.com or call me at (850) 567-0037.

3 Steps to a Smooth and Successful Homebuying Experience: Part 2

So last week we began talking about the three steps you can take to be on your way to a smooth and successful homebuying experience. We discussed step 1 which was about the importance of meeting with a lender at least 3-6 months before you plan on buying. This week we will be talking about step 2.

Step 2: Take the time to learn about the real estate market in the area where you are looking to buy before you are ready to buy.

Real estate is very local in nature. Different cities and towns have different characteristics in populations, jobs, topography, local economics, ect... that cause each city or town to have a unique real estate market. Because of this, it is very important that before you buy a home you learn as much as you can about the real estate market where you are buying a property.

The first thing you should do is to find and team up with a reputable REALTOR who is actively selling real estate in the area where you are looking to buy. Let the REALTOR know what your housing needs are, and ask the REALTOR to educate you about the real estate market where you are looking to buy. A good REALTOR should be able to help you get a grasp of what the housing inventory is like in the area where you are looking to buy as well as educate you about specific areas and neighborhoods in the city or town where you are looking to buy. This is crucial because the more you know about the real estate market where you are looking to buy, the better you will understand how much house you can get for your money. This will also help you to be able to tell the diffrence between what is a good deal versus what is not a good deal in the area where you are looking to buy.

Since at this point you should have already spoken to a lender about a home loan, you and the REALTOR that you are working with should be focusing on learning about homes that are in the price range that you can afford. Once you have an idea of your local real estate market, ask your REALTOR if he/she can set you up on an automatic email notification that will send you information on homes in your price range and that fit your housing needs. These automatic emails are going to further help you to get a good understanding of the real estate market in the area that you are looking to buy, and it will help to keep you in the loop as to what potential homes for you are on the market. This means that when you are ready to get serious about finding and making an offer on a property, you will have a good idea of where and what homes you should be looking at.

One tip I would suggest is to write down and keep track of the homes you really like in the automatic email notifications that you receive. That way when you are ready to buy, you can go back and look at those homes you took note of to see if they are still available, and if they are, you can go look at those homes. This little trick will save you time, because once you are ready to buy, you will spend less time figuring out which homes you want to go look at.

All in all, being educated about the local real estate market where you are looking to buy a home and getting set up on an automatic email notification that sends you information on newly available homes that fit your housing needs and that are in your price range, is going to enable you to more quickly find the right home. Once you are ready to buy a home, you will spend less time looking at homes because you will have a better idea of where and what homes you should be looking at. Also, when you find the right home, you will be more confident about your decision because you will know you are getting a good deal.

Stay tuned until next week, when I will be discussing step 3 in the "3 Step Process To a Smooth and Successful Home Buying Experience." Next week I will be discussing the importance of learning about the actual steps in the homebuying process ahead of time.

3 Steps To a Smooth and Successful Homebuying Experience: Part 1

Buying a home is usually a very exciting event that most people look forward to. Whether you are looking to buy a home for you to live in, a vacation home or an investment property, most people think positive thoughts when they think about buying a property. However, as many homeowners will tell you, the homebuying process can sometimes become a quite stressful experience filled with many bumps and hiccups along the way. This is because it can be quite an involved process with many moving parts. To those who have never been through the process before ( and even to some that have) the homebuying experience can be a little overwhelming. Indeed, if you begin moving foward with purchasing a home when you are not sufficiently prepared to do so, you will most likely become one of those people who looks back and categorizes their homebuying experience right up there with the time they had to go to the dentist to get their tooth pulled. On the otherhand, if you are prepared and know a little about the homebuying process when you begin moving foward on your journey to purchase a home, your experience could be quite an enjoyable one.

Today I am going to be giving you some advice on how you can help ensure that your homebuying experience ends up being a good one. Specifically, I will be laying out the what I call the "Three Step Approach to Prepare You for Purchasing a Home." I know...the name is very creative. If you adhere to these steps though, your homebuying experience will most likely be a much better one. So without further delay, let's begin.

Step 1: If you are obtaining financing to purchase your home, meet with a lender to discuss your home purchase 3-6 months before you plan to purchase a home.

If you are obtaining financing to purchase a home it is a very good idea to meet with a reputable lender or mortgage broker well before you are actually planning to purchase a property. The reasons for this are many. First off, it will give your lender the opportunity to check your credit and analyze your finances which will help them determine how much of a loan that you can qualify for. This information is very important to know before you begin looking for a home, because it will set a price range for you to stay within when you are searching for a property. What if you have been looking at properties in the $200,000 range for a month, and then you find out you can only afford to purchase a home up to $165,000? Well, you have just wasted a whole lot of time, gas and energy that could have been better spent looking at homes that you are actually able to purchase. This can lead to frustration but can easily be avoided by finding out a head of time how much of a loan you can qualify for.

In addition to this, if while meeting with your lender you discover that there is something that might be holding you back being able to obtain a home loan to purchase a property, the lender can tell you what is holding you back and may be able offer you some advice on how to fix the issue so you can qualify for a home loan. If you find out this information early on, you probably have a good chance to fix the issue by the time you are ready to purchase a home. For example, a lot of the time people discover that their credit score is lower than they expected which renders them unable to get a home loan. Your lender can review your credit score and report with you and offer you helpful tips on how you can build your credit up quickly to where it needs to be in order to get a home loan by the time you are planning to buy. On the other hand

Also, when the lender meets with you to determine how much of a home loan you can qualify for, he is going to evaluate your income and expenses. By the lender knowing this information ahead of time, he can give you advice on things you should and should not do to help ensure that you are approved for a home loan. If you are approved for a loan, he may be able to tell you how much you might have to increase your income or how much you have to reduce your current expenses so that you will be able to qualify for a certain amount of money. For instance, let's say you knew that you wanted to buy a home in the $150,000 range, but you currently only qualified to buy a home up to $135,000. The lender could tell you how much you would have to reduce your expenses so that you could qualify for a home loan up for a home up to $150,000. If you knew this information ahead of time you could begin making strides to reduce your expenses so you could get the loan to purchase a $150,000 home by the time you are planning to buy. Also, if you found out that you had to save more money than you thought for a down payment, you would have time to save up if you found out that information well before you were planning to buy.

Finally, it is important to meet with a lender well before you purchase a home because it will allow your lender to educate you about all of the different loan programs available and match you up with the best loan program to fit your needs. For example, are you looking to purchase a home that is in a rural area or that is on the outskirts of town? If so you might be eligible for the USDA Rural Development Loan which would enable you to get 100% financing without having to pay any monthly mortgage insurance premiums. Or, are you are a first time homebuyer? If so, you might be eligible for one of several downpayment/closing costs assistance programs.

Finding out about all of the different loan programs ahead of time is also useful, because there might be certain steps you have to take (which might take some time to complete) in order to be eligible for certain loan or downpayment assistance programs. For example, if you are a first time homebuyer and want to qualify for a first time homebuyer downpayment assistance program through The Tallahassee Lender's Consortium, you have to take a class on homeownership before you can qualify for the downpayment assistance.

Having a lender match you up with the best loan program to fit your needs is important because it could save you lots of money over the long haul.

That's it for today, tune in next week for Step 2 in the "Three Step Approach to Prepare You for Purchasing a Home" which has to do with the importance of learning about the local real estate market where you are planning to purchase a home before you buy a home.

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.