Real estate supply and demand figures are stifling home builders in their attempt to re-enter the housing market in Tallahassee. Even after coming off of two years of historic lows in new home starts, home builders are finding that the market is still way over supplied with inventory from existing home sellers.
This post contains three real estate graphs that show the dilemma that home builders are facing. The first two chart building permit and sales relationships for single family detached homes, while the third graph displays the current months of supply of homes for sale in Tallahassee.
Sadly, the real estate graph above shows the severity of the fall of new home construction in Tallahassee. We know single family home sales (and thus production) will remain very low until we see a turn in home buying activity in Tallahassee.
The same data that created the real estate graph above is presented in a different manner below, showing the market’s two-year shift to consumption in new home inventories. This means that we are seeing more new construction selling than being built (a reduction in supply), and this is a good thing.
This would normally indicate positive signs for home builders, but we have to look at the entire market in full (meaning we have to look at existing homes as well) before we can truly assess the demand for new homes being built [click to view real estate supply and demand graph]
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