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Will Your Local Market Be Facing The Compression Effect Like This?
While this is not the first time I have written about the impact of the compression effect on future house values in North Florida, it is the first time that I have produced a graphic that clearly portrays its meaning.
If you own a house or plan on buying a home in Leon County, it would be prudent to understand how this developing trend might impact the value of your home when it comes time to sell.
Supply And Demand For HousingIn order to understand what the compression effect is all about, we first must understand the relationship between the supply of houses for sale and the demand for houses in Leon County.
The following graph measures the relative supply and demand for houses across all price ranges in Leon County.
There's a lot going on in the graph above, but it is much more simple than it might appear at first blush.
What we're really tracking here is the "relative" supply of houses ... meaning the total inventory of houses for sale measured at the current rate of consumption. In other words, relative supply is the current supply of houses for sale relative to the current rate of demand from buyers, measured in "months of supply."
We track the average number of ... more

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