One statistic that we track here on a very regular basis is something that we refer to as the Home Sales Success Rate. Every day we track each home that enters and leaves the market, and then we sort out what has occurred. For the homes leaving the market, we determine whether they left successfully (by being sold), or whether they failed (the listing expired, was canceled, or was withdrawn). By dividing the two into the whole, we can then determine the success rate (and failure rate) of Tallahassee home sellers.
Home Sales Success Rate Is Dropping
The home sales success rate had been rising for more than a year, after hitting a miserable, unthinkable bottom at 30% in June 2009. A few weeks ago, we appear to have crowned the market and now are heading the other way. With the end of the Homebuyer Tax Credit behind us, this might mark the beginning of an extended down cycle as we work through the distressed properties in Tallahassee with a smaller buyer pool.
In the real estate graph above, the green section shows that currently 43% of home sellers were successful in the past year, while the red section shows that 57% failed to sell their home. To put some perspective on this housing market, this is the best home sales success rate that we have seen in over two years! It is hard to believe that more than 1/2 of home sellers have failed over the past three years, but this is why it is so important to hire the best real estate company for the job.
Future Movement In The Home Sales Success Rate
We expect this graph to enter an extended period of decline for quite some time. Right now, there is a lack of home buyers in the market, mostly due to the lack of equity in homes for people wanting to move from a home that they already own. This dilemma will be the biggest obstacle to the recovery of the housing market for quite some time.