How Changing Home Prices In Tallahassee Are Shifting The Market

Soaring home prices have changed the housing marketSoaring home prices have changed the look for a lot of the graphs that I have maintained over the past thirty years selling homes in Tallahassee. The second one in our report is a great example of the change that we are seeing in the market.

Today's report includes three graphs that show just how far home prices have risen as we move towards conditions where home affordability might become the greatest challenge the housing market has ever embraced.

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The Impact Of Soaring Home Prices

The Median Single-Family Detached Home Price Is Soaring

The first graph in our report shows the annual median home price. Bear in mind, this report was produced on November 1, 2021, so it's likely we'll see even more growth when we look at these at year-end.

Graph of the annual median single-family detached home price

The median home price has risen 65% over the past ten years, an annualized rate of more than 5.1%. If this continues for another ten years, the median home price in Tallahassee at this time in 2031 will be $465,000!

But following the median home price really doesn't give us a fair evaluation of how home values really move. Why? Because the median home price is more reflective of what buyers are spending. When mortgage interest rates drop (like now), people can spend more on a home without paying a higher monthly mortgage payment, The opposite is true when interest rates rise, it reduces the amount that buyers can spend on a home.

But tracking values allow us to see what sellers are getting (in other words, home values report a more accurate appreciation level). When we run the numbers, home values have risen 5.9% annually which far better represents the current average annual appreciation rate. This year, it will be more than double that amount!

Home Sales By Price Range Shows Shift In Market

Take a look at how home sales are distributed by price. The graph shows the cumulative count, starting at the bottom of the graph (or top-down in the table) and moving to the opposite end.

Graph displays how home sales are distributed by price

I really like the image the graph creates as it shows that so many of our sales remain below $200K (52% of all sales), yet we know it’s nearly impossible to find a home at that price or below in most of Tallahassee.

Nearly 90% of all homes sold were at prices below $400K, yet we’re seeing bidding wars in most of Tallahassee when a $400K home hits the market. Perhaps the biggest shocker is that we’ve seen 32 homes sell for more than $1M this year, which is more than double the amount sold in all ten years combined in the 1990s!

Ten Years Of Change

Here are some interesting statistics for 2021 when compared to 10 years ago:

  • Homes < $100K:  7% now versus 29% 10 years ago. This is a pretty large change for a ten-year period of time. In 2011, nearly 1 out of every 3 homes sold in Tallahassee was at a price under $100,000, whereas today it's only 1 out of every 14 homes sold. This gives you an idea of how home affordability is eroding.
  • Homes < $150K: 23% now versus 49% 10 years ago. Similar to the last point, we've gone from 1/2 of the homes sold being below $150K to now fewer than 1/4 of the homes sold falling below $150K.
  • Homes > $700K: 3% now versus 1% ten years ago. Thanks to low mortgage interest rates, we're seeing more people buying homes that ten years ago would put them in the top 1%. So putting some real numbers to this, ten years ago only 15 people purchased a home for more than $700,000. This year, through nearly ten months of the year, that number has risen to 115!

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How 2021 Home Sales Compare With Past Years

We know the market is robust and that buyers are competing for the few available homes for sale, but how do home sales this year stack up to previous years?

Graph ranks 2021 for home sales at different price points

This graph measures cumulative sales starting at the highest price range and moving towards the lowest price home sold in Tallahassee. This means that it is best read from the bottom-up, and that each number on the left vertical axis includes all homes sold at that price and higher.

For example, we see that homes that sold at prices above $1M are ranked #1 in 2021 when compared to all years prior. So too are all homes priced above $950K. In fact, homes priced above $150K and higher are having the best year ever for home sales in Tallahassee.

When we drop down to homes priced above $100K, 2021 only ranks #3. When we isolate homes under $100K, it's the 14th best year of the past 18 years. But when we look at the entire market, 2021 ranks as the 3rd-best year.

If you want to sell a home that is worth $150K or more, it's the best year ever to sell the home in a predictable time frame while also receiving top-dollar for the home.

Recent Housing Reports

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If you want to know where homebuyers chose to live in 2021, then this video was produced specifically for you. Follow along as I share the top-ten selling communities in Tallahassee in 2021, with insight on what it costs to live in each neighborhood as well as the number of homes that sold.
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How Bad Is It? SHOCKING Building Permits Report!
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Existing Homes Update - Tallahassee Real Estate
Just as you find in most local US housing markets, the number of homes for sale in Tallahassee remains far too few, measuring below 900 properties and just above 500 when you remove those already under contract with buyers.
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Economic Outlook For The Housing Market
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Building Permits Reveal Major Housing Crisis
How do we know there is a major housing crisis brewing? Look no further than building permits! This video examines building permits in detail, as the issue of home affordability is going to become one of the most prominent topics for many years in the national media.
6 Housing Market Rumors Debunked (1 Confirmed)
7 different housing market rumors are perpetuated as “FACT” in various forms of "hype." Discussion of this "housing market news" has been ongoing for years, so today, I want to put them all to rest.
Tallahassee Real Estate Report March 2022
The pace of this video moves fast, and I cover more than ten key real estate trends, so you might want to go back to any graph that you want to spend more time on.
Home Ownership Is Radically Different For Millennials
This is a simple millennial housing case study that will clearly show that the millennials will face a housing market like no other generation going back to post-World War II.
Are We Overbuilding Again?
I've been asked recently for my opinion on the number of homes being built in the US. Specifically, people are wondering if the ghost of 2006 has come back to bring more homes to the market than what can be consumed?
Why It's Alway About Supply And Demand In Real Estate
It's all about supply and demand. The real estate supply and demand dynamic tells us everything we need to know to forecast home sales in any given area.
Is Home Ownership A Hedge Against Inflation?
Could homeownership today still be a smart hedge against inflation? This is a study of real estate during inflation.
How Soaring Home Prices Are Impacting The Housing Market
Report includes three graphs that show just how far home prices have risen as we move towards conditions where home affordability might become the greatest challenge the housing market has EVER embraced.
How Often Do Home Prices Fall?
Are home prices falling? Will house prices fall soon? Home prices are soaring, buyers are having to pay above most sellers' asking prices, and the housing market feels just like a feeding frenzy during Shark Week on the Discovery Channel.

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