In less than half an hour, the National Association of REALTORS® (NAR) will publish the monthly existing home sales report. Based upon the recently published Pending Home Sales report, I would not be surprised if it shows a seasonally adjusted rise in the number of homes that sold over the past year. But don’t get too excited.
When the Pending Home Sales report was published a few weeks ago, the chief economist for NAR (Lawrence Yun) explained:
“The pace of a home sales recovery still depends more on job creation and an accompanying rise in consumer confidence.”
So basically, a smarter way to anticipate future movement in both existing home sales and pending home sales is to watch the jobs report to see whether the local market is creating or losing jobs. All in all, the existing home sales report is “old news,” while the jobs report and pending home sales report better enlighten us on the state of the housing market.
Existing Home Sales Report In Tallahassee
When we look at one year trends of homes sold in Tallahassee, we see the current downward trend. The number of homes selling each day, on average over the past year, is right around 7. The average during the 1990s was closer to ten, so our market can currently be considered slow.
Pending Home Sales Report In Tallahassee
Unfortunately, when we observe the pending home sales report (below), we see that the existing home sales report (above) is going to continue on its downward path.
What Real Estate Reports Mean For Home Buyers And Home Sellers
The message that home buyers should take from these reports is that prices are falling and there are some excellent home buying opportunities in Tallahassee. But take your time. Make sure you are purchasing at a price that the market is seeking, not at one in which the market is leaving. Work with a trusted real estate expert in your market area and you will get a great home value.
Home sellers on the other hand need to react in one of two ways to this information. The market is dropping, and home values are declining. This means that the best chance to get the highest dollar for their home is now, as these prices will be history in the months ahead. So home sellers need to make a choice:
- Sell the home now and price it below the current market
- Wait to sell the home in 7 to 10 years
That’s right, it will take at least five years for the market to get through the glut of homes for sale in Tallahassee, meaning any home seller that decides to take a “hold strategy” must plan on a minimum of 7 years to be conservative. While this is not what many Tallahassee homeowners want to hear, it is the right medicine for what ails them. The fewer homes that we see on the market, the stronger and sooner the recovery will occur.
So, the bottom line … if you have to sell, sell now. If you do not have to sell, leave the market and plan to be there for a while.