How Changing Home Prices In Tallahassee Are Shifting The Market

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.

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.

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!