By Joe Manausa - Tallahassee, FL, Tallahassee Real Estate
(Joe Manausa Real Estate)
My favorite blog posts are ones that are inspired by reader questions, and today we respond to a doozy from "DC" who asks about investing and student housing. We get all kinds of questions from our readers, but this one is very insightful in that I believe he suspects there could be a problem brewing for some of the investors in the Tallahassee real estate market. And I believe he is correct. Student Housing As A Real Estate Investment Anybody who has taken a drive near Doak Campbell Stadium in Tallahassee has seen firsthand the boom of student housing that is being added to the market. Thus, it comes as no surprise that savvy investors are concerned about the impact of all this new supply in the rental market. Recently, I received the following question: What do you think the effect of...
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By Joe Manausa - Tallahassee, FL, Tallahassee Real Estate
(Joe Manausa Real Estate)
Watch For Trend Changes If you want to know the beginning of the next phase of the housing market recovery, just keep an eye on the relative home supply. You can always track supply levels at The Market Bulletin. The next phase you say….? Absolutely. I believe that the transition from a buyers’ market to a sellers’ market will follow this pattern: Inventory changes from growth to reduction. Home Values Fall At Accelerating Rate Year over year sales increase? Inventory levels reach 6 months of supply (balanced market). Home Values Stop Falling/Start Rising. Glut Of Homes In Tallahassee When we look at the supply and demand of homes in Tallahassee, it becomes readily apparent that the supply side is awash with too much inventory. In the chart below, we see that there is still more than a ...
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By Joe Manausa - Tallahassee, FL, Tallahassee Real Estate
(Joe Manausa Real Estate)
Pending home sales appear to be testing a new market bottom, as the rate of decline in homes under contract has crawled to a stop. This is very good news, as we cannot expect future home sales to rise if new sales contracts are on the decline. We measure these new sales contracts, which the industry calls “pending home sales,” in order to get a picture of the future of closed home sales (typically 2 months into the future. By tracking contracts, these future closings are follow a consistent pattern. In the real estate graph above, we observe that the past two weeks has seen some stabilization in what was a plummeting pending home sales report. We hope that this continues and that we can start see this trend rise from what we hope to be the “final” market bottom. Read more: http://www.m...
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By Joe Manausa - Tallahassee, FL, Tallahassee Real Estate
(Joe Manausa Real Estate)
Home sales are falling, just as we predicted each time we tracked the pending home sales information from the Tallahassee Board of REALTORS Multiple Listing Service. We knew if pending sales were falling, then closed home sales had to follow suit. Closed Home Sales Decline In Tallahassee Closed home sales, tracked on a daily basis in the Tallahassee MLS, have declined steadily since the end of the Homebuyer Tax Credit (where closed home sales were pretty much completed by June 30, 2010. The “market bottom” that we observed in August 2009 is still holding, but we have every indication to believe that a new one will present after the turn of the year. With pending home sales having reached a new market bottom, it is very likely that closed home sales will follow suit. Read more: http://w...
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