Final Thoughts On Appreciation And Price Per Foot
As I was "cleaning up" my spreadsheet used to determine real estate appreciation in Tallahassee, I found a couple of real estate graphs that had not been used in either "How To Measure Real Estate Appreciation" or "Real Estate Appreciation." One in particular could be very informative and helpful in determining the next market turn.
As I was doing research into Tallahassee housing appreciation, I found that a simple methodology utilized historic information on home sales and specifically the selling prices compared to the square footage of the home. If the market price per foot was rising, most likely we were experiencing real appreciation, whereas if the market price per square foot was falling, Tallahassee homes were depreciating.
Year Over Year Changes In Price Per Square Foot
This real estate graph shows the relative change each month in price per square foot of homes sold in Tallahassee. For example, March of 2009 recorded home sales that were 11.1% lower (depreciation) than March of 2008, when using price per square foot to compare. Contrarily, January of 2009 was 8.1% higher than January of 2008 (appreciation) using the same standard.
Perhaps the most enlightening point that I see from this graph is the "norm" for the past 20 years has been appreciation. Look at how rarely we see a year-over-year trend towards depreciation (like less than 1 per year until 2007). Once 2007 hit, we began to experience the opposite trend. Rarely, we see a year-over-year trend towards appreciation during the past two years.
Tallahassee Home Price Per Square Foot Trend Still Dropping
The bad news is that we are still seeing depreciation in the Tallahassee real estate market. The good news is that the turn just might be in our site. If you have been following any of the national news, many large markets are starting to report that year-over-year unit sales are rising, though prices are still falling.
This has been our predicition here for quite some time, that we will see prices drop at their greatest rate when the unit-sales turn towards growth. This is normal. This is how all market cycles make the turn, with buyer motivation stimulated by depressed prices. We just haven't made it to that turn yet, but with other markets already there, I know we should be within 6 to 9 months from the turn.
|Subscribe in a reader||Subscribe by email|
As a reminder for those who subscribe to the Tallahassee Real Estate Blog by email, some embedded pictures and videos might not be appearing in your email and you might need to click the title header to go to your browser where all will be visible. Additionally, if you would like to respond (leave a comment) to this article, you will need to “click through” to the blog site to post your feedback.
If you like this Article then please subscribe to my blog through a full RSS feed, or you can Subscribe by Email.You will be able to stay informed about the happenings in the Tallahassee Real Estate Market.