Joe Manausa - Tallahassee Real Estate

Recently a reader left a comment (which I appreciate) indicating that he thought my data was incorrect for home sales in Southwood. In doing my research to validate the data, I figured I might as well turn it into a blog about current home sales in Southwood. The reader wrote:

Joe,
I really enjoy reading your Blog, but I work in 2 of the communities that are in the top ten of your list, and I know that your figures are wrong!. Where did you get the figures for this list??

The sold numbers are nowhere near where you say they are?

This is where an understanding our source data is so important when reading real estate reports. Most real estate reports are based upon information from the local, regional, or national MLS, but unfortunately the MLS only represents 50-65% of what is actually selling in the market. For a complete understanding of home sales in Southwood, we need to look to the Leon County Tax Records.

So, here is what I’ve done. I’ve pulled the information from all of the sales recorded in Leon County (The Tallahassee real estate market) and have included the previous twelve month’s sales below (note these are for sales RECORDED through October 31, 2008).

Southwood Home Sales Cooling

Here is a simple real estate graph of the homes sold in Southwood each month, with the 12 month trend showing as a red-line (average number of homes sold in Southwood each month for the trailing twelve months).

As you can see from the graph, less than 11 homes per month are selling in Southwood, down from a market high of 32 home sales per month in November of 2005.

Previous Blogs Containing Southwood Information Previous Blog On Southwood In Tallahassee

Southwood Home Sales For Past 12 Months

Below are the recorded home sales in Southwood that I have used in this report (for the most recent twelve months of recorded sales). If my records are off in any way, please provide input below so that I can fix the problem.

Click Here to Sell all Sales In Southwood for the Previous 12 months

In yesterday’s blog, I chose to revisit an old blog topic and wrote “Time to Revisit The 3000 Square Foot House.” This was a follow-up article to one that I wrote in July about what has happened to the 3000 square foot house. The article was inspired by a question that I had received from a relocation company that wanted some background information about the Tallahassee real estate market and felt that a good litmus test would be to see some history of home pricing for 3000 square foot homes.

Tallahassee Home Inventory Holding Value

Fortunately, this type of research provides some residual information that is very valuable. In doing the data gathering for this blog, I decided to take all the home sales in Leon County (Tallahassee real estate market) from the Tallahassee MLS and break them down into five size groups (1000,2000,3000,4000 & 5000 square feet). For example, the 4000 square foot homes in Tallahassee group was compiled from all homes sized from 3600 to 4400 square feet.

What this shows is rather amazing. Unit sales are down anywhere from 42% to 58%, yet prices have only come down very little. I think this is a sign that there is still a lot of room for prices to diminish, but the key to that will be inventory levels (and whether they continue to reduce). If inventory levels continue to drop, it will ease the pressure on pricing, and that is why we track Tallahassee home inventory levels on a daily basis.

Tallahassee Average Home Trails The Market Trends

When we graph the above information, we find that the “2000 square foot house” is doing worse than the other categories. Since the majority of our sales fall in this category, we can see why the overall market is down over 50% from peak to now.

Tallahassee Home Sales Trend By Home Size

This final real estate graph shows how the greatest impact of falling unit sales has been centered on the 2000 square foot home. With this portion of the market approaching a 60% reduction from the top of the market, it has had a huge impact on the overall market figures.

Again, the key to finding the bottom will be aligned with inventory movement in the Tallahassee real estate market. Our consistent monitoring of the flows of homes both on and off the market will give us all the insight necessary to determine the turn in the Tallahassee housing market.

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Back in July, I wrote a blog about what has happened to the 3000 square foot house. The article sprung from a question that we received when doing work in the relocation industry (corporate moves and affinity relationships). Since it has been several months since I wrote that article, I figured a follow-up would make a great basis for a real estate blog for Tallahassee housing.

The last article showed what was happening, by price range, to homes that were sold in Tallahassee. While it showed that housing prices had declined slightly, it also provided a clearer picture of the market. I figured we could take a look at homes +/- 10% in size from 3,000 square feet and then graph the sales over the past six months (and beyond). Here is the graph of 3000 square foot homes in Tallahassee from the Tallahassee Board of Realtors Multiple Listing Service (MLS):

We have seen a continuation of the fall of prices in the 3,000 square foot home range. Tomorrow, I’ll show you how the rest of the price ranges have performed.

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The Federal Reserve announced a $500 billion commitment to purchase mortgage back securities (MBS) and a $100 billion commitment to purchase debt of Fannie Mae, Freddie Mac and the Federal Home Loan Banks. This infusion of capital into the mortgage market caused the average 30-year mortgage rate to drop to the lowest rates in years.

I have seen estimates that the 30-year mortgage rate will be at 5.5% today and BestInfo, Inc., a Dover, Vermont-based mortgage data company, predicted today’s rate would be 4.875%.

Current Mortgage Rates Have Huge Impact On Home Values

To fully appreciate what this mortgage rate drop means to a typical Tallahassee family, let’s take a look at how the payment on a 30-year mortgage of $200,000 changes with different mortgage interest rates:

Description	Rate	Monthly Payment	6 Years Payments
Historical Rate	9.000%	($1,609.25)	($115,865.66)
Mid November Rate	6.200%	($1,224.94)	($88,195.53)
BankRate	5.500%	($1,135.58)	($81,761.62)
BestInfo	4.875%	($1,058.42)	($76,205.98)

As you can see, the rate drop (using the rate from Best