Joe Manausa at Tallahassee Real Estate, who writes an excellent blog on the market conditions of homes for sale in Tallahassee, Fl, includes in his predictions on housing market trends the additional factor, in the shadow inventory, of houses that were previously on the MLS but did not sell. These would be houses that the owners tried to sell, had no success, and so gave up, at least for the time being.
However, Tallahassee has at least 2 years of house supply in the shadow inventory, based on the statistics and calculations of Joe Manausa, however, the supply would most likely reach 4 years if the potential houses will be added. Actual sales has determined that relative sup0ple is based on the demand for houses, thus, it is tough to determine the relative supply in 2 to 4 years from now. However, if the market conditions & the connection of the housing market with the government will change, the prediction of Joe Manausa will most likely come to reality.
Then, there are two factors affecting the shadow inventory; foreclosures (& pre-foreclosures), and homes, condos and townhouses taken off the MLS. According to statistics published by the Federal Reserve Bank of Atlanta the number of houses in foreclosure, and the number of houses over 90 days late in mortgage payments, both rose consistently over the 4 quarters of 2011 for Leon county.
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The Statistic of Federal Reserve Bank of Atlanta shows that the foreclosure in Leon county alone increased approximately 0.65% showing 2,860 houses, condos & townhomes to 3,220. However, the 90 days late in mortgage payment increased by 0.34% from approximately 1,110 to 1,330. Soon, there will be an increase trend in the shadow inventory as soon as these houses will enter the market.
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Almost half of the houses in 2011 were taken off from the market since they did not sell. Many were re-listed, but many were not. All of these houses that were not listed are waiting or the increase of demand in order for them to be listed again. The homeowners want to sell, but they cannot find a buyer. This oversupply has the effect of lowering overall housing values.
The drop in housing value should not be taken for granted because it also affects the level of demand of homes for sale in Tallahassee. The explanation why most home buyers are home sellers before because the cost of houses are less expensive to buy and interest rates are at unknown low levels. That is most home purchases are made by people who are looking for a new home to better suite their families or lifestyle, either to a larger, or smaller home. Another factor for these home purchases are those people who wanted to transfer to a new neighborhood or a new environment. But before transferring, they have to sell their existing homes first.