TALLAHASSEE, Fla. (WTXL) — The hunt for a new home is proving difficult this year, both nationwide and in Leon County. More and more people are deciding to sign on the dotted line.
The first half of 2021 in Leon County saw the least amount of inventory for homes in 8 years, with the exception of 2015. For January – May 2021, there was only 2,222 homes for sale in the Tallahassee Metropolitan Area.
All over the Tallahassee area, houses are popping up to meet a growing demand. Steven Louchheim is the CEO for the Tallahassee Board of Realtors. He says the current housing market is unique.
"Buyers are having a hard time finding a home to buy, sellers aren't having a hard time selling. But sellers are buyers right now," said Louchheim.
The Tallahassee Board of Realtors found the Tallahassee metro area had the 4th highest record for sales in 2020. 4,656 houses closed in the area; that includes Leon, Wakulla, Jefferson, and Gadsden counties.
"It's hard to compare 2021 with 2020 which was such an anomaly. We had a couple of months with nothing going on last year," said Louchheim.
That trend continues. Closed sales of single-family homes for May 2021 were up about 25% for Leon County; up 34% for the Tallahassee metro area; and up 58% statewide.
Local real estate professionals caution that the supply of houses for sale on the local market is considered low and buyers are subjected to an aggressive seller’s market which has the effect of rapidly increasing sales prices combined with quicker home sales. Local realtors have historically advised sellers to wait until their homes are under contract before they enter into a contract to buy a new home, but the current home buying climate has resulted in the opposite as sellers do not want to list their homes for sale until they first find a new home and get it under contract.
Still, realtors advise buying now.
"Now's a good time to buy if you can find something. Interest rates ticked down recently. They're at historic lows, maybe they'll continue to be that way but if they go up a little bit, that affects your ability to buy," said Louchheim.
According to the U.S. Department of Housing and Urban Development (HUD), home construction fell 10% in April 2021 from the previous month primarily due to a sharp rise in housing material costs, specifically, lumber. According to Forbes, lumber futures – a type of contract that allows people to buy or sell commodities for a certain price on a fixed rate – hovered around $700 per thousand board-feet in late January. By May 7, lumber futures reached their high at $1,670.50 as supplies to many future home sites became scarce. Demand for lumber continues to outpace the rate of production, along with that of appliances, drywall material, and plastics.
As a result, mortgage rates fell steadily in 2020 and reached a 30-year low of 2.65% on 30-year mortgages in January 2021. The Federal Reserve has recently announced it will move forward the timing of its first-rate hike from 2024 to 2023. At the same time, the Fed also raised its forecast for core inflation in 2021 from 2.5% to 3.4%
According to Realtor.com, the typical U.S. home spent 58 days on the market from 2017-2019. The economic uncertainty and lockdowns associated with COVID-19 raised that figure to 72 days in 2020. By June 2021, homes across the U.S. are selling an average of 37 days after being listed which is 35 days less than the 2020 COVID-anomaly and 21 days less than the three years before the pandemic.
Many of the largest metros in the South are leading the nation in quickest sales with lowest median days on the market including Huntsville, AL (11 days), Nashville, TN (14 days), Raleigh NC (15 days), Columbia SC (16 days), Durham-Chapel Hill, NC (18 days). Tallahassee homes are currently spending a median of 37 days on the market, compared to 47 days year over year. As national demand remains elevated, Realtor’s data is beginning to show that time on the market this year is not expected to decrease beyond seasonal norms.
Statewide average median days on market for listed homes is 41 days, which is on average 29 days fewer than the previous year. The Tallahassee MSA median listing price is $264,450, well below the statewide average of $328,956 and the median listing price change year over year is also below the statewide average and the market has seen the smallest drop in active listing count statewide. At 3.1, the Tallahassee MSA housing stock is significantly above the statewide average of 1.57 months.
Projections from the Bureau of Economic and Business Research suggests Leon County's population is expected to increase by nearly 45,000 people by 2045. If the average family size remains the same, Leon county will need an additional 19,000 places for people to live.
Barry Wilcox heads up permitting for the county/. He says right now, the county is on par to hit its 2045 housing goals.
"To give you an idea, in 2011 at the bottom, we issued 105 new single family permits. This last year, we issued 414 and at this point in the fiscal year, we're already at 452 for 2021 so we've already surpassed 2020," said Wilcox.