Yes, the market is getting stronger every day, but that does not mean that we have seen the last of the distressed houses for sale.
From coast to coast, I am seeing reports about short sales and foreclosures still being very prominent in the market, and that is very true still in the Tallahassee real estate market.
With roughly 30% of all home sales reported as non-arms-length, these problem properties will continue to impact home prices and home values throughout the 2014 selling year.
Distressed House Sales Continue
With our first real estate graph of 2014 populated with several weeks worth of information, we see an actual increase in the number of foreclosures, short sales, and bank owned properties sold in the Tallahassee MLS.
In the graph above, the green bars (measured on the left vertical axis) measures the number of arms length home sales each year, the red bars (also measured on the left vertical axis) show the number of distressed home sales, while the red line (measured on the right vertical axis) records the ratio of distressed sales to all home sales each year. Surprisingly (though still very early in the year), we see the level rising after falling all last year.
House Values By Type
Another interesting view of the Tallahassee real estate market can be seen when we segment the market by sale type.
In this graph, average home values measured each year (shown in terms of price per square foot) from 2003 through late January 2014. Note the spike in distressed house values this year, the first in five years and the highest recorded values since 2009.
House Prices By Type
Average house prices do not necessarily follow the same trends as average home values, as clearly seen in this next graph.
This appears to show that buyers are (on average) spending just over $220,000 for an arms length home purchase, while distressed home purchases are going for about $105,000 (less than half).
This likely means that many of the remaining foreclosures and short sales are investment class properties, whereas the typical arms length purchase is from single family homes that are primarily owner occupied.
We will continue to monitor the trend of distressed houses sold in Tallahassee, as they will continue to have an impact on house values for all home sellers and buyers.
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