Fewer home owners are entering the market this year to sell their houses. This is actually "news" for the Tallahassee real estate market, and it might be the most significant news of the year for our ailing market should it continue.
If you saw The Weekly Special Report a few weeks ago, than you likely understand the impact on house values as the imbalance between supply and demand for houses in Tallahassee improves.
But I'm wondering how the market will react to this in the early stages of 2016, as it appears that houses priced below $300,000 will either be in-balance or actually entering a seller's market (after 8 long years, it's nice to type the words "seller's market" again).
Number Of Fresh New Listings Declines
For the purpose of evaluating seller behavior, we often categorize listings into one of two groups.
- Fresh listings are houses that have not been on the market in the past few years
- Stale listings are houses that recently failed to sell and are being re-listed, either by the same real estate company or by a new one.
Most real estate reports do not distinguish between these two groups, so they often mislead one to believe that new properties are available when in fact they have been trying to sell for years.
The graph below shows fresh listings only, so it is a much more accurate view of new house seller behavior in the Tallahassee real estate market.
Currently, the average number of fresh listings each month is 367 (down 8% from the year prior).
In fact, all but one month so far in 2015 has seen fewer fresh listings enter the market when compared to the same months a year ago.
This is a good sign for the market, as we know many house owners need values to continue to rise so that they can sell and move.
With fewer houses coming onto the market, this too is good as it will help reduce the glut of houses that are available and a diminishing supply will eventually push values higher.
The Future Of Our Real Estate Supply
Home sales continue to improve, but there is still a lot of upside remaining in the real estate market recovery. Our current rate of sales is consistent with what was recorded in 1997, yet our population has grown nearly 30% since that time. Either the rate at which people want to move has slowed, or we will start seeing more fresh inventory hit the market as values rise to levels that will allow for equity-based sales.
If you are one of those house owners who purchases a Tallahassee house in the 2002 through 2007 time period and would like to move when your value returns, we offer a free house valuation service that will let you know your current status. All you need to do is drop me a note and we'll get our valuation team working for you!