Home Affordability In Tallahassee
I received a question from a reader "Jim" in Nashville, TN who asked"
Joe-
Looks like buyers in your area have a lot to choose from. What about affordability? How many of these listings fall into the sweet-spot of homes that are actually selling?
This is such a clear and simple question that I figured a few graphs could show us the answer.
Homes For Sale In Tallahassee
When we look at homes for sale in Tallahassee, we find (happily) that the supply has been dropping steadily since April of 2008. When we look at the real estate graph below, we see the distribution of available homes in Tallahassee across all the price ranges.
Perhaps the only real surprise is the growth of homes available below $75K, as this is one price range in which we can longer build more units because the cost of constructing the units is higher than the going price (does this sound like long-term opportunity???).
Homes That Sold In Tallahassee
The graph of closed home sales in Tallahassee shows us that the real estate market has been cut in half over the past two years. Some price ranges look like they have been slashed ($750K and up, please $0-$75K), while most of the others appear to have fallen just slightly.
The important thing to remember when looking at this graph is that price range shows you what buyers are paying, not what houses they are buying.
So even though the $150K-$200K price range appears to have fallen just slightly, the reality is that many homes priced in that range in 2007 sold in a lower price range this year. And many of the homes that sold in that range this year, used to be priced in the $200K-$250K price range.
What Homes Are Selling In Tallahassee
The real question that Jim wanted answered was based upon our pricing distribution, and there is a simple way to view this.
The graph below shows that 61% of homes for sale in Tallahassee are priced at or below $200K.
Homes priced below $200,000 are very affordable for many Tallahassee home buyers and the current Homebuyer Tax Credit will also benefit people buying them. I look for homes priced below $200K to recover the fastest in Tallahassee.
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Discussion
When you say $200k is affordable in Tallahassee, are you, by extension, saying that there are enough well-paying jobs to for people to be able to afford that?
I, uh, caught a falling knife last October b/c I was happy with the mortgage, down here in SW FL. A year later, I realize, with all the additional costs that go into a owning a home, it's a wonder anyone can own a home more than $125,000 if you're make around $60k a year.
I think $40k to $60 is a pretty realistic salary for people in this day and age. In my case, my wife was laid off and went back to school ... I suspect a lot of people are in our boat, living on one salary and just trying to get by.
Anyway, by my humble standards, I would say about 25% of the homes in Tallahassee are affordable.
I went to FSU for two years, two decades ago. It was a beautiful college town then, and I'm sure it remains that way.
I suspect that if you're not working for the State of Florida or FSU or FAMU, you probably can't afford those higher-priced homes.
Hey Tony,
You must be a first-time visitor and think I'm just spewing the REALTOR Credo "now is the time to buy." Take a look around and see what I've written.
Actually, the term "affordable housing" is a government term and in Tallahassee that figure is approaching $200K. The reality is that our unemployment is above 10% (highest I can ever recall) and I'm not so sure any home is affordable for the laid-off and "cut-back" people in our market.
Even with negative tone ... I appreciate you commenting and providing for more discussion. I hope all works out for you and your wife.
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