High End Homes Carried Along By Low Mortgage Interest Rates
If you have any interest in the high end homes market in Tallahassee, you probably should be monitoring mortgage interest rates.
Right now, what can I say about interest rates? They are low. They are wonderful. They make buying affordable.
But are they here to stay?
That is the (multi) million dollar question. Because as you can see from today's graph of the high end homes market in Tallahassee, they are the key to keeping it in recovery.
High End Homes Buoyed By Mortgage Interest Rates
The graph below shows all homes sold each year that were priced over $400,000 (yes, that is the high end homes market in Tallahassee :)).
Each of the price ranges are stack-graphed on top of each other in the graph above. Homes sold for $400,000 up to $600,000 are shown in blue, $600,000 to $800,000 are shown in red, $800,000 to $1,000,000 are shown in green, while homes sold for more than $1,000,000 are shown in purple. All home sales are measured on the left vertical axis.
Mortgage interest rates are plotted as a black line and measured on the right vertical axis.
Anybody can see the meteoric rise that appeared when mortgage interest rates dropped below 7%, and I'm quite concerned about this segment of our market when rates return to "normal." The average mortgage interest rate is just below 8.5% when looking back 50 years, and I'm not so sure Tallahassee has the jobs that will compensate enough of our citizens to afford these homes in the not-so-distant future.
To put the growth of high end homes into perspective, the Tallahassee real estate market averaged 25 home sales each year in the 1990s for homes priced over $400,000. The decade ending in 2010 averaged 237 per year, an 837% rise!
I know we didn't see an equivalent rise in population or jobs, so I'm concerned that affordability due to low mortgage interest rates has pulled people into this market. You have to wonder to whom will they sell their homes if rates go up to 8.5%, 10%, 12%, etc.
High End Homes For Sale In Tallahassee
Here are the ten most recently listed high end homes in Tallahassee. It is updated twice per day, so any time you return you will find the newest offerings in the Tallahassee MLS.
[idx-listings linkid="350039" count="10" showlargerphotos="true"]
I hope you gained something from our high end homes report, you can drop me a note any time if you have questions about this segment of the Tallahassee real estate market.
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