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June 2024 Real Estate Market Update   Written By: Ivan Marquez Executive Assistant, Hum Real Estate

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This month’s report dives into some of the real estate industry’s hot topics: housing inventory, buying in the off-season, home prices, homeowner equity, and shifts in the rental market. 

Inventory

Months of inventory is a real estate metric that estimates how long it would take to sell all the homes currently on the market at the current pace of sales. It is a typical indicator of the strength of the market, as well as the sales prices of homes. It can also indicate whether sellers or buyers may have the upper hand.

It is said that a “balanced market” is having between 4 and 5 months of inventory on hand, while a high inventory may suggest a market in which the buyer has the upper hand (where there are more sellers than buyers), and a low inventory may suggest a market in which the seller has the upper hand (where there are more buyers than sellers).

Since this is a hyperlocal metric, we look at Tallahassee's months of inventory on hand. As of the latest figures, we sit at 3.9 months. This is an improvement over last year this time when we sat at 3.2 months on hand, but still below a balanced market. A low month’s inventory on hand leading into the peak real estate season of the spring and summer is an indicator this metric will continue to fall.

One of the reasons for this may be that homeowners are staying in their homes longer than they have in the past.

While people used to sell every 5 to 6 years before 2008, the average has now increased to about 9.3 years. This shift is most likely due to factors like aging in place and low mortgage rates. Despite the recent slower real estate market, home equity continues to rise, largely driven by increasing home prices.

Home Prices

Rising home prices have driven significant equity growth. 

The Federal Housing Finance Agency (FHFA) reports a 57.4% national increase in home prices over five years - with Florida seeing a 74% increase. Over the past 30 years, home prices rose 326% - an incredible source of equity.

Equity

Nationally, we are in a wonderful position when it comes to equity.

39.3% of U.S. homeowners own their homes outright, while 29% have over 50% equity. That means 68.3% of homeowners have a significant amount of equity, which provides financial flexibility despite market shifts. 

Buying in the Off-season

A recent study by the National Association of Realtors® (NAR) showed January and February are prime months for buyers. Homes stay on the market longer, and prices are about 15% below the home price peaks of June. Plus, there’s less competition. 

NAR reported that 51% of buyers are also sellers, giving them the advantage of home equity. Data shows homeowners with a mortgage hold an average of $319,000 in equity. This shows how homeownership remains the top way Americans can build wealth.

Rental Prices

Rents are forecasted to do what they have historically done since 1988 - increase. 

For those considering whether to buy or rent, it’s worth asking: If you could go back 10 years and buy a home, would you? 

Bottom Line 

Rising home prices and growing equity offer advantages for homeowners, while winter is a prime time for buyers. As 2025 nears, understanding these trends is key to smart decisions.