What Supply Looks Like At Historical Rates Of Demand ... GOOD!

By
Real Estate Agent with Joe Manausa Real Estate 8508880888
https://activerain.com/droplet/H4c

Housing SupplyWhile we know there is an abundance of homes or glut in the Tallahassee real estate supply, it is important to know that the real issue is not a supply-side problem anymore.

All the questions and signs make it appear as if real estate supply (or over-supply) is the culprit:

Then why is this problem not a supply-side problem?

Tallahassee Real Estate Supply Is Fine For Historical Demand

Because our current rate of demand is running at just above 50% of traditional averages. When we calculate an expected level of home sales in Tallahassee, and then plot the current supply against the demand, the following graph is produced.

Tallahassee Housing Supply

In the real estate graph above, the red line shows the average months of supply of homes today when compared with our historical rate of sales (each month is shown with its seasonal adjustment).

As we can see at the far right in the graph, the current supply of homes would be just over 6 months of supply if demand were at average historical levels. This would be a level in which market equilibrium would be met, thus we could call the market in balance.

The Real Tallahassee Real Estate Supply Issue

Ultimately, we know there is more real estate supply sitting on the sidelines, so the real estate market equilibrium would not really be this close. But it would be far better than our current reality.

And our current reality is dealing with a demand problem. There are so many homeowners who want to move and buy another home, but they are trapped in their current homes. They cannot sell, so they cannot buy.

The demand-side issue is what needs to be fixed and then time will cure the rest of the housing market woes.

Home values are still declining, so people who are waiting to sell a home in Tallahassee are either going to wait five or more years, or they are just performing an exercise in futility until they decide to move.

Can You Safely Join The Tallahassee Housing Supply With A Short Sale?Right now, banks are offering favorable solutions to homeowners who are upside down, and smart home sellers are jumping on these deals.

If you think a short sale is a solution for you, but you are concerned about the consequences, just drop me a note and we can schedule a time to provide you expert guidance.

If enough home sellers short sale today, they will be qualified to buy in just a few years, and that would help bring back demand to the market. We need this increased demand to reduce the real estate supply.

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
Real Estate Market Trends
Location:
Florida Leon County Tallahassee
Groups:
Realtors®
The Lounge at Active Rain
Almost Anything Goes
Posts to Localism
Market Reports
Tags:
real estate report tallahassee
real estate supply and demand tallahassee
housing supply and demand tallahassee

Spam prevention
Show All Comments
Rainmaker
1,131,619
Chuck Carstensen
RE/MAX Results - Elk River, MN
Minnesota Real Estate Expert

The supply and demand is on a similiar scale in MN I believe too...at least in most areas.

Aug 30, 2012 12:29 AM #1
Rainmaker
420,686
Michelle Francis
Tim Francis Realty LLC - Atlanta, GA
Realtor, Buckhead Atlanta Homes for Sale & Lease

Joe, 

Great info about Tallahassee supply & demand. We have strong demand today compared to last year, however, we are not where we were previously in a more normal market.

Now the challenge is to predict what the heck normal buyer levels will be in the future?

All the best, Michelle

Aug 30, 2012 12:55 AM #2
Rainmaker
787,979
Kevin Mackessy
Blue Olive Properties, LLC - Highlands Ranch, CO
Dedicated. Qualified. Local.

Great compilation of statistics for your local area.  Demand seems to be rising in my neighborhoods as well.

Aug 30, 2012 03:15 AM #3
Rainer
178,712
Rosalie Evans
Meritus Group Real Estate - Sioux Falls, SD
The Evans Group, Sioux Falls, SD Homes For Sale

I count my lucky stars that the Sioux Falls market is strong for resale and for demand. The market is rocking here with many people getting multiple offers. :)

Aug 30, 2012 03:21 AM #4
Rainmaker
1,162,133
Joe Manausa
Joe Manausa Real Estate - Tallahassee, FL
Tallahassee Real Estate

Thanks Chuck. For us, the hidden supply is where all the variables lie ...

Aug 30, 2012 03:59 AM #5
Rainmaker
1,162,133
Joe Manausa
Joe Manausa Real Estate - Tallahassee, FL
Tallahassee Real Estate

Hey Michelle, I think future normal is fairly simple to calculate.

Take the "past normal" and adjust it based upon population change and occupant density.

For example, the graph above includes a growth rate of 1.2% each year and 2.2 people living per housing unit.

Aug 30, 2012 04:01 AM #6
Rainmaker
1,162,133
Joe Manausa
Joe Manausa Real Estate - Tallahassee, FL
Tallahassee Real Estate

I'm jealous Rosalie :)

Aug 30, 2012 04:02 AM #7
Rainmaker
1,079,379
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

Joe, we are definitely seeing increased buyer demand this year and multiple offers for well-priced homes, especially the lower price points in desirable areas. Tallahassee is definitely months of supply are trending downward and that is a good thing!

Sharon

Aug 30, 2012 05:50 AM #8
Rainmaker
490,543
Lorraine or Loretta Kratz
Crescent Moon Realty, Inc. & Land N Sea Auctions. - San Marcos, CA
Certified Negotiation Consultants

Great comments, and information on your local market, it seems San Diego is doing a little bit better, than most area's in certain price ranges, I spoke to a homeowner the other day their bank (Chase) is doing a loan modification and reducing the principal, and the homeowner is delighted.

Aug 30, 2012 12:05 PM #9
Ambassador
2,008,027
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Joe - There are people who want to buy who just can't.  However, here we have not enough inventory.

Aug 30, 2012 04:52 PM #10
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
1,162,133

Joe Manausa

Tallahassee Real Estate
Looking for Tallahassee Real Estate?
*
*
*
*
Spam prevention

Additional Information