Tallahassee Bull Run
I had a request from a long-time reader yesterday that I felt would make a great follow-up article to the one that we did a few days ago on Southwood in Tallahassee. For those of you who saw the headline and were hoping for a “Running of the Bulls - Southern Style!,” then I am sorry to disappoint. This article is about the Bull Run Subdivision in Tallahassee, Florida, not about running with the bulls in Pamplono Spain.MLM, a reader of my work for over 40 years, asked “Hi Joe, Could you do a blog on Bull Run similar to the one you did on Southwood on July 14th? Thanks a million.” How could I refuse such a request, even though I wrote a Bull Run Subdivision Information blog just two months ago!
The reason that this question is so timely is that Bull Run is very similar to Southwood, in that both neighborhoods are relatively new and new construction makes up a larger percentage of the total market than in most neighborhoods. As we saw in Southwood, the asking price for new construction was driving down the asking price for resale homes. Looking at Tallahassee’s Bull Run today, we see the same thing.
What this chart doesn’t show is that 26 homes are on the market in Bull Run, with 18 of them being new construction and 8 being resales. This is certainly a sign that this is a new neighborhood that is just starting to take shape.
This graph points out some key points that everybody in the Tallahassee real estate market should be aware of.
- The average asking price of a new construction home (new home) in Bull Run is $375,000
- The average asking price of a resale home (used home) in Bull Run is $503,000
- The average asking price per square foot of a resale home is 6% higher than a new home
These key points are totally out of whack with “normal.” I am concerned that it might be a sign that homeowners in Bull Run are not in touch with current home values in the Tallahassee real estate market.
Finally, taking a look at one-year sales trends for the Bull Run neighborhood, we find that unit sales are down roughly 50% from the top of its market (November 2006) and the average price has dipped about 10% from just six months ago.
This blog has shown that Bull Run is just starting to go through a period of correction. Builders have listened to the market and are building homes a little smaller and a bit cheaper. Once the resales adjust to this new level, you can be sure that sales in the Bull Run neighborhood will be as vibrant as anywhere in the Tallahassee real estate market.
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Joe Manausa is a real estate investor and the Broker and Co-Owner of Century 21 First Realty. He can be reached via e-mail through the Tallahassee Real Estate Website or catch his latest writings on the Tallahassee Florida Real Estate Blog , or by calling (850) 386-2001.
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July 18th, 2008 at 11:19 am
Joe,
What do you see happening with these resales? Price drop, taken off the market, or a combination of both depending upon the individual seller’s circumstances?
July 18th, 2008 at 11:30 am
Joe,
Good article. I am renting in Bull Run b/c it is such a great, convenient neighborhood.
It should be pointed out to your readers that Bull Run recently opened a new “phase” that offers smaller homes at more affordable prices, with lease purchase options.
This may skew some numbers a bit.
July 18th, 2008 at 3:45 pm
Thanks.
July 18th, 2008 at 3:57 pm
What makes it even worse is the developers have already pruchased the land in the Southwood and Bull Run developements. This means that the cost of land is a “sunk cost” and is not factored into their selling price.
Since the cost of building is probably close to $70 per square foot, without considering the price of the land, the developers can keep dropping the prices further and further.
I feel terrible for the homeowners in those communities, but they really have to start being realistic. Unfortunately, I bet most of them do not have knowledgable Realtors like Joe. Their Realtors are probably telling them what they want to hear rather than showing them the gut-wrenching data.
July 18th, 2008 at 6:30 pm
Jim, definitely a combination. The Sellers that must sell will price to the market, the ones that can wait will wait. Bear in mind, our population is growing, our market will rebound strong for those who can wait.
July 18th, 2008 at 6:32 pm
Gooch, welcome back, I was worried that you “retired.” You are referring to what I referred to ask the builders adapting to a changing market, smaller-less expensive homes. That will be the trend for the next year or two.
July 18th, 2008 at 6:33 pm
Steve, the actual cost is much higher than $70 per square foot ($100-$130 I suspect) but your point is spot-on.