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What Came First? The Chicken Or The Egg (In Real Estate)
The Tallahassee housing market is undergoing the greatest change that I have seen in my twenty plus years as a real estate agent in Tallahassee. Values are declining and buyer activity is declining, leaving the real estate market in a state of uncertainty. As with much of the rest of the US housing markets, Tallahassee has a “chicken or the egg” problem.
Those of us who have a great interest in the state of the housing market are faced with something similar to the age-old question of what came first, the chicken or the egg. In real estate, the question is “what will come first, the buyer or the seller?”
Roughly 2/3rds of the homebuyers in Tallahassee have traditionally needed to sell a home before they could buy. In a market where roughly 60% of homeowners have either no equity or actually have negative equity, they are trapped in their current homes and cannot sell without first having to raise some money. This large pool of “trapped” homeowners represents the normal group of people that we look to buy a home, so the big problem in real estate is how are we going to get people out of their current homes ... more
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