Search Listings

A Real Look At Real Estate Appreciation In Tallahassee

One of my pet peeves from within the real estate community relates to how many individuals wrongly calculate and report real estate appreciation.

They look at the difference in average home prices (not values) over time and correlate the change to rising and falling home values. As I have proven in multiple articles in the past, this produces erroneous results.

However, there is a way that we can closely estimate the true real estate appreciation rate in Tallahassee, all we have to do is focus on home values.

Real Estate Appreciation In Tallahassee Has Returned For Many Homeowners

First things first. Most sources would define appreciation as an increase in the value of an asset over time, thus real estate appreciation is the increase in the value of "homes" or "land" or "buildings" over time.

These are different classes of assets, and thus they must be measured separately. For the purpose of today's article, I will be looking to determine the appreciation rate for homes in Tallahassee (using condominiums, townhouses, and single family detached homes).

Would you be surprised to discover that the annual appreciation rate for a house in Tallahassee, from the beginning of 1991 through September of 2013, is right at 3.15%? That's right, even with the housing market boom and subsequent bust, homes have appreciated at an annual rate of just over three percent.

Tallahassee Real Estate Appreciation Rate

Measuring Real Estate Appreciation

The graph above provides home sellers and home buyers a lot of information to consume.

The vertical blue bars, measured on the left vertical axis, are the monthly recordings of the average price per square foot for existing (resales) arms length home sales from January 1991 through September 2013. The blue line shows the one-year average of those values, starting at $50 per square foot in 1991 an ending at $101 per square foot last month.

The red line measures the annual appreciation rate from every point looking back to January 1991, and is recorded on the right vertical axis as a percentage. So if you had purchased a home in January of 1991 and sold it last month, you would have recorded a 3.15% annual appreciation rate. Of course, had you sold that house in May of 2006, you would have recorded a 6.49% annual rate of growth.

Finally, the green arrow on the graph shows a continuous growth rate in home values based upon the growth rate in the 1990s. It is a projection of where we would expect to be had there not been a boom-bubble-bust in the Tallahassee real estate market. Based upon this non-scientific regression to the mean, the home value correction appears to be on track.

Current home values are below that "expected value" and will likely rise (on average) above the green line in the near term.

Real Estate Appreciation And Your Home

As a home owner, you should be happy to see real estate appreciation returning to the market.

But you also need to realize that supply and demand ultimately determine whether or not YOUR HOME is appreciating or depreciating.

If you own a $160,000 in Northeast Tallahassee, you are appreciating at a rate higher than 3.15% right now.

Of course, if you own a $600,000 home anywhere in Tallahassee, your home is depreciating due to the glut of homes for sale that will compete with yours.

So the key is to understand what your specific market (the market for your individual home) looks like, and what you need to do to be competitive enough to attract buyers to your home.

If you would like to know more about real estate appreciation for your home, just drop me a note and we can schedule a time to examine your home and what you can expect to receive were you to put it up for sale in the Tallahassee real estate market.

Post a Comment

Blog Navigation

Posts By Category

All Categories Advice: Real Estate (484) Blogging Real Estate (189) Distressed Property (31) Foreclosures (3) Glossary of Real Estate Terms (31) Government and Real Estate (30) Homes For Sale (123) Housing Market Conditions (1232) Housing Report (54) Lis Pendens (4) Main (1025) Mortgage / Finance (71) New Construction (1) Off Topic (83) Our Listings (3) Our Sales (7) Real Estate Market Snapshot (26) Real Estate Opinion (3) REALTOR News (11) Tallahassee (89) Tallahassee Neighborhoods (454) Uncategorized (50)

Posts By Month

Blog Roll

Luxury Homes For Sale New Construction Homes For Sale Homes For Sale With Swimming Pools Homes For Sale On Acreage Homes For Sale In Killearn Lakes Plantation Homes For Sale In Killearn Estates Homes For Sale In Southwood Homes For Sale In Killearn Acres Homes For Sale In Summerbrooke Homes For Sale In Golden Eagle Plantation Homes For Sale In Piney Z Homes For Sale In Bull Run Homes For Sale In Betton Homes For Sale In The Ox Bottom Area

Tag Cloud

Grab Our RSS Feed

Tallahassee Home Searches

Contact Us

Joe Manausa Real Estate
2066 Thomasville Rd
Tallahassee, FL 32308
(850) 366-8917

© Joe Manausa. All Rights Reserved.
Privacy Policy|Terms of Use|DMCA Notice