Median Home Price And Value Explodes
If you are thinking about selling or buying a home in Tallahassee now or in the next few months, and you don't want to leave any money on the table, take a moment to educate yourself on housing market conditions today.
One great way to understand the real estate market is to study how the median home is changing over time. We have provided everything you'll need in this report.
First, start by comparing the homes shown below (all priced within 10% of the median), and then follow below with our graphs and analysis of median home prices, values, and sizes in the Tallahassee real estate market.
Median Priced Homes For Sale In Tallahassee
The following single-family detached homes for sale are all priced within $25K of the current median home price.
Median Home Report Video
Exploring The Median Home In Tallahassee
Today's report examines the median home price, median home value, and median home size in Tallahassee. The first three graphs segment the homes by age (new versus existing homes), while the final three graphs segment the homes by type (single-family detached, townhomes, and condominiums).
New And Existing Median Home Price
Our first graph shows the median home price of existing homes, new homes, and all homes sold in Tallahassee from 2003 through July 24, 2020.
This graph provides some important insight to home prices in Tallahassee.
The gray bars reveal the median home price each year, while the blue bars show the median new home price and the red bars report the median existing-home price.
Looking at the gray bars for the overall market, we see that today's median home price of $220,000 is 20% higher than the $184,000 median home price in 2007 where it had peaked from the last housing market expansion stage.
But when we look at new homes, the blue bars, we see a whopping 60% in the cost of new homes today versus those back in 2007! Looking at the existing homes, we see less than a 15% change. So what does this all mean?
Two things. Today's lower mortgage interest rates are allowing buyers to spend more, but the huge difference in price between new and used is going to have to tighten.
I believe it means that we'll see new homes pulling up resale prices at a faster than normal rate for the foreseeable future.
New And Existing Median Home Value
Unlike prices that tell us what buyers are spending, values are a better way of measuring appreciation in the real estate market.
This graph shows us the average price per square foot of new homes, existing homes, and then all homes collectively.
With existing homes, supply and demand determine values, but with new construction, we can easily substitute "cost" for "value" as builders have some control over what they bring to the market. For example, the previous price graph showed us the median new home price has not grown since 2017, yet above we see that cost has risen.
What's interesting from the median values graph is that the market for existing home appreciation peaked a year earlier than it did for prices, with high values recorded in 2006. It wasn't the same for builders who peaked in 2007.
The median new home value (cost) has risen 25% since 2007, from $138 per square foot to $173 per square foot, while the median existing-home value has risen just 4% from $128 per square foot to $133 per square foot. Overall, the median home values is up less than 5% from $130 per square foot to $136 per square foot.
The 55% rise in the minimum wage since 2005, coupled with the rising cost of land has made it very hard to build new homes anywhere near the cost that today's median home buyer is able to spend.
So new homes cost 25% more, yet existing homes have only risen 4%. So what does this all mean?
I believe it means that we'll see new homes pulling up resale values at a faster than normal rate for the foreseeable future.
New And Existing Median Home Size
Our next graph shows how home sizes have changed since 2003.
The fact that prices and values move at different rates means that we need to know that we're not comparing apples to apples when we say that the median home price in one year has changed a certain percent from another.
If we look at the peak of the market median home size in 2006, it was 1,390 square feet. But when we compare it with the bottom of the market home size in 2012, it was 1,640 square feet. That's an 18% larger home that people were getting at the bottom of the market!
So we always keep an eye on home sizes whenever we address home prices and home values so that we understand any difference between the two.
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Different Results By Property Type
Our final three graphs segment the market by property type, and you will see that the market has not treated all property types the same. This is something to think about should you be interested in the long term value growth of the home you own or want to buy.
Median Home Price Segmented by Property Type
Our next graph shows the median home price each year for single-family detached homes (red), townhomes (blue), and condominiums (blue dash).
This graph shows that single-family detached homes have reached a median home price of $252,000 (up 47% since hitting a low in 2011), while townhomes have reached $121,250, up 55% since their low back in 2013, and condominiums are up a whopping 88% since their low back in 2012.
What it doesn't show is the new construction impact on those values (something we will look at next time we do a median home sales report).
Two things that heavily influence the change in the condo market are the "new" downtown high-rise condos as well as the developments of condominium homes that are much pricier than condos built in the past. Again, we'll dig deeper into this in future reports.
Median Home Value Segmented by Property Type
The median home value graph below shows that single-family detached homes have reached an all-time annual high average, while single-family attached homes are still making up ground.
The red line in the graph above shows that detached homes have risen in value by 45% since 2012. This is an annual increase of 5%, but we are seeing the rate accelerate due to the low supply of homes for sale.
For those of you who are concerned that the growth rate is crazy, the annual change in values since 2003 is only 1.7%, which is well below the 3.2% we saw from 1991 through 2003. I believe this all but proves there is significantly more upside remaining in the market.
The blue line in the graph above shows that townhomes have risen in value by 62% since 2012 for an annual increase of 6.6%. When looking back to 2003, that's an annual increase of less than 1%, so townhomes have been performing poorer than have detached homes and perhaps have an even higher upside.
Condominiums are an entirely different story. There are far fewer sales and the wide array of condominium types is expanding so it's not really fair to compare the past with the present. Downtown hi-rise condos didn't exist in 2003, neither did the condominium homes in NE Tallahassee, so the long-term analysis would be too skewed for an accurate analysis.
Median Home Size Segmented by Property Type
Our final graph shows the median home size by type.
The only point I'll make from this graph is that it appears as if single-family detached homes in Tallahassee are growing!
I believe we would need information going back further than 2003 to prove this point, but recent median home sizes are clearly larger than those reported from 2003 through 2011.
Could this be related to lower mortgage interest rates allowing people to buy "more" home, I believe so. In the future, when rates do eventually rise, I would expect to see these averages move lower.
I hope you enjoyed our median home sales report, if so, please remember to "like" and share this report using the social media buttons located at the top of the page!
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