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The Effects Of New Construction In A Declining Market

I was recently having a conversation with a colleague who mentioned that some parts of the Tallahassee real estate market were showing signs of stabilizing and that appreciation was beginning to show in certain neighborhoods. Now, if you have been following the Tallahassee real estate blog for any time, you know that I know this is not true. It is merely the effect of new construction of homes during a declining market.

The one neighborhood in Tallahassee where this confusion can best be seen is Southwood. If we look at overall value trends and price trends in Southwood, we can see what appears to be a market turn, but further examination proves that averages just don’t tell the whole story.

When we look at three real estate graphs, we can see why the confusion over value trends is occurring, and why the real answer lies in new home construction. Most Tallahassee neighborhoods have little or no new construction occurring, but Southwood is still producing new homes.

Home Price Trends In Southwood

When we look at the overall housing market in Southwood, home values appear to be rising this year versus the two previous years. In the graph below, the average sales price of homes sold in Southwood is at $270K, which is a nice rise from last year’s average of $259K.

Home Prices In Southwood

Home Value Trends In Southwood

Home values appear to be following a similar trend. Last year the average home value in Southwood was $124 per square foot, while this year’s home sales have averaged $127 per foot.

Home Values In Southwood

Home Values In Southwood (New Versus Existing)

When we separate new home construction from existing home sales though, the real picture emerges. In the graph below, existing home sales values are plotted in blue, while new home values are plotted in red. Home buyers in Southwood are still willing to pay a premium for brand new homes, and this premium makes the overall market values (green) appear to be rising. But does this help you if you are trying to sell a home in Southwood?

Home Sales In Southwood

The reality is the new construction of homes in Southwood is only adding to the inventory and this only serves to fuel the declining market. As long as buyers are willing to absorb these new homes, this recovery in Southwood (and all of Tallahassee) is going to take that much longer. This is why Southwood has a higher than average failure rate for existing home sellers, and it is probably why many home sellers have been misled to believe they will fetch more for their homes than the market is currently willing to pay.

Home sellers have to make a decision. If you want to get the best price possible, either sell right away or wait a minimum of 5 to 7 years for values to return and then rise beyond today’s prices. There is nothing to gain in testing a declining market, if you need to sell your home, price it correctly and then use the most aggressive home selling plan that will get your home sold fast.

List Of Recent Home Sales In Southwood

Neighborhood Address SP Price/SQF Closing Date Year Built SQF
Southwood 4138 Four Oaks Blvd $155,000 $102 6/13/2011 2007 1,521
Southwood 3785 Longfellow Road $410,000 $117 6/13/2011 2007 3,516
Southwood 3099 Dickinson Drive $336,500 $131 6/10/2011 2011 2,570
Southwood 4070 Colleton Court $139,900 $94 6/3/2011 2003 1,483
Southwood 3570 Four OaksBLVD $145,000 $104 5/31/2011 2005 1,394
Southwood 3665 LONGFELLOW ROAD $185,000 $117 5/31/2011 2004 1,584
Southwood 2124 Fernleigh Drive $255,500 $111 5/31/2011 2003 2,308
Southwood 4105 Raleigh Way $160,000 $113 5/27/2011 2006 1,416
Southwood 2545 Twain Drive $207,000 $102 5/27/2011 2005 2,033
Southwood 3152 Nathaniel Trace $283,900 $142 5/27/2011 2011 2,005
Southwood 2988 Verdura Point Drive $225,000 $97 5/26/2011 2002 2,308
Southwood 4067 Colleton Court $174,000 $100 5/23/2011 2003 1,744
Southwood 3174 Baringer Hill Drive $435,000 $154 5/17/2011 2006 2,825
Southwood 3258 Newberry Boulevard $158,000 $112 5/13/2011 2003 1,416
Southwood 4020 Colleton Court $118,000 $89 5/2/2011 2003 1,324
Southwood 3120 MIST FLOWER RD. $192,000 $137 5/2/2011 2009 1,400
Southwood 3594 Strolling Way $281,297 $155 4/30/2011 2010 1,809
Southwood 3710 Longfellow Road $317,000 $118 4/22/2011 2004 2,681
Southwood 3075 Bent Grass Lane $230,000 $104 4/21/2011 2010 2,212
Southwood 4022 Blair Stone Road $169,900 $111 4/18/2011 2005 1,524
Southwood 2467 Goldenrod $309,900 $152 4/18/2011 2011 2,033
Southwood 4308 Grove Park $205,000 $133 4/13/2011 2005 1,541
Southwood 3587 Strolling Way $349,750 $141 4/13/2011 2010 2,488
Southwood 3950 Shumard Oak $215,000 $114 4/8/2011 2010 1,889
Southwood 3590 Strolling Way $288,042 $144 4/8/2011 2010 2,005
Southwood 3622 Strolling Way $277,404 $153 3/31/2011 2010 1,809
Southwood 3972 Shumard Oaks Boulevard $135,000 $91 3/29/2011 2005 1,483
Southwood 3799 Esplanade Way $179,900 $106 3/17/2011 2002 1,695
Southwood 4097 Faulkner $406,500 $134 3/4/2011 2008 3,033
Southwood 3760 Overlook Drive $295,000 $129 3/2/2011 2003 2,292
Southwood 3202 Dunbar Lane $304,900 $131 3/1/2011 2010 2,333
Southwood 3910 Shumard Oaks Boulevard $145,000 $93 2/25/2011 2010 1,551
Southwood 4151 Faulkner Lane $450,000 $151 2/25/2011 2007 2,989
Southwood 3567 Strolling Way $312,999 $139 2/25/2011 2010 2,246
Southwood 3154 Duxbury $328,000 $131 2/25/2011 2011 2,502
Southwood 3198 Dunbar $525,000 $158 2/25/2011 2011 3,326
Southwood 3254 Belle Meade Trail $704,000 $175 2/16/2011 2005 4,012
Southwood 3158 Buckhead Trace $255,000 $108 2/15/2011 2002 2,368
Southwood 3630 Strolling Way $269,900 $149 2/15/2011 2010 1,809
Southwood 4238 Avon Park Circle $143,000 $108 2/14/2011 2005 1,324
Southwood 3054 Cummings Avenue $157,500 $113 2/9/2011 2006 1,394
Southwood 4067 Colleton Court $148,000 $85 2/7/2011 2003 1,744
Southwood 2421 Orange Avenue $239,900 $110 1/28/2011 2010 2,181
Southwood 3574 Strolling Way $299,900 $143 1/28/2011 2010 2,100
Southwood 3613 Mossy Creek Way $659,000 $169 1/28/2011 2011 3,900
Southwood 3166 Dunbar Lane $506,099 $167 1/28/2011 2011 3,022
Southwood 3169 Mulberry Park Blvd $135,000 $91 1/26/2011 2002 1,483
Southwood 2525 Twain Drive $280,000 $111 1/26/2011 2005 2,530
Southwood 3996 Shumard Oak Boulevard $90,250 $68 1/19/2011 2005 1,324
Southwood 3049 Merchants Row Blvd $143,000 $94 1/13/2011 2007 1,521
Southwood 3753 Four Oaks Blvd $273,000 $127 1/13/2011 2002 2,156
Southwood 3243 Appleton Drive $470,000 $138 1/11/2011 2004 3,414
Southwood 3312 Calumet Drive $145,000 $104 12/30/2010 2006 1,394
Southwood 3242 Belle Meade Trail $380,000 $135 12/30/2010 2006 2,816
Southwood 2464 Lantana Lane $305,000 $150 12/29/2010 2010 2,033
Southwood 3606 Biltmore Avenue $178,000 $109 12/28/2010 2006 1,633
Southwood 2570 Twain $321,000 $108 12/22/2010 2007 2,983
Southwood 3250 Carollton $215,000 $122 12/21/2010 2004 1,767
Southwood 4121 Fitzgerald Road $242,250 $106 12/20/2010 2006 2,275
Southwood 3254 Carollton Dr $215,000 $112 12/10/2010 2003 1,914
Southwood 4307 Four Oaks Boulevard $154,900 $89 12/1/2010 2006 1,744
Southwood 3153 Buckhead Trace $222,500 $109 12/1/2010 2001 2,035
Southwood 2425 Goldenrod Way $315,290 $150 11/30/2010 2010 2,100
Southwood 2425 Orange Avenue $159,990 $115 11/12/2010 2010 1,393
Southwood 3165 Buckhead Trce $229,000 $112 10/29/2010 2002 2,045
Southwood 3590 Four Oaks Blvd $149,000 $107 10/28/2010 2005 1,394
Southwood 2123 Sunlight Terrace $283,000 $103 10/28/2010 2004 2,756
Southwood 3794 Piney Grove Dr $550,000 $168 10/28/2010 2003 3,271
Southwood 4052 Shady View Lane $245,000 $120 10/26/2010 2004 2,035
Southwood 4063 Colleton Court $139,000 $94 10/12/2010 2003 1,483
Southwood 4066 Four Oaks Boulevard $126,000 $81 9/29/2010 2007 1,551
Southwood 3910 Shumard Oaks $129,360 $83 9/29/2010 2010 1,551
Southwood 2417 Orange Avenue $159,900 $115 9/29/2010 2010 1,393
Southwood 2409 Orange Avenue $169,000 $121 9/29/2010 2010 1,393
Southwood 2421 Orange Avenue $200,000 $92 9/29/2010 2010 2,181
Southwood 3076 Indian Grass Lane $219,385 $138 9/28/2010 2010 1,588
Southwood 3162 Coneflower $321,216 $125 9/28/2010 2010 2,570
Southwood 3798 Piney Grove Drive $389,000 $145 9/27/2010 2010 2,692
Southwood 4043 Swift Way $172,000 $117 9/23/2010 2004 1,474
Southwood 2444 Rain Lily $230,494 $145 9/22/2010 2010 1,588
Southwood 3993 Four Oaks Blvd $130,000 $98 9/20/2010 2001 1,324
Southwood 3025 Four Oaks Blvd $198,755 $143 9/17/2010 2010 1,393
Southwood 3906 Shumard Oaks Blvd $190,861 $101 9/16/2010 2010 1,889
Southwood 4229 Summertree Dr $335,000 $135 9/16/2010 2006 2,486
Southwood 3089 Merchants Row Blvd $141,500 $93 9/13/2010 2007 1,521
Southwood 2416 Rain Lily Way $199,000 $143 9/13/2010 2009 1,393
Southwood 3918 Shumard Oaks $190,000 $101 9/10/2010 2010 1,889
Southwood 2413 Orange Avenue $205,000 $98 9/10/2010 2010 2,088
Southwood 3914 Shumard Oaks Blvd $150,000 $97 9/9/2010 2010 1,551
Southwood 3187 Dunbar $690,000 $165 9/9/2010 2008 4,185
Southwood 3771 Longfellow Road $344,000 $131 9/7/2010 2005 2,629
Southwood 2428 Rain Lily $250,000 $115 9/3/2010 2010 2,181
Southwood 4112 Biltmore Avenue $315,000 $133 9/3/2010 2005 2,368
Southwood 4108 Biltmore Avenue $297,500 $132 9/1/2010 2004 2,250
Southwood 3186 Coneflower $210,000 $132 8/30/2010 2010 1,588
Southwood 3190 Coneflower $274,900 $126 8/27/2010 2010 2,181
Southwood 2108 New Dawn Road $215,000 $97 8/26/2010 2003 2,219
Southwood 3029 Four Oaks Blvd $365,000 $119 8/23/2010 2008 3,060
Southwood 4257 Summertree Drive $301,000 $135 8/13/2010 2006 2,227
Southwood 3249 Carollton Drive $390,000 $152 8/13/2010 2006 2,565
Southwood 3809 Piney Grove Drive $283,000 $126 8/6/2010 2003 2,250
Southwood 2412 Rain Lily Way $215,450 $123 7/31/2010 2009 1,757
Southwood 4226 Avon Park $140,000 $106 7/30/2010 2005 1,324
Southwood 4304 Four Oaks Blvd $149,990 $97 7/30/2010 2010 1,551
Southwood 3724 Riverton $149,900 $97 7/30/2010 2010 1,551
Southwood 4058 Four Oaks Blvd $228,000 $100 7/29/2010 2007 2,289
Southwood 3682 Mossy Creek Lane $785,000 $155 7/22/2010 2005 5,064
Southwood 3793 Chanticleer Court $510,000 $138 7/20/2010 2005 3,700
Southwood 3640 Mossy Creek $800,000 $154 7/20/2010 2005 5,186
Southwood 4028 Shady View Lane $235,000 $120 7/1/2010 2004 1,953
Southwood 3780 Ivy Green Tr $234,500 $139 6/30/2010 2002 1,683
Southwood 4122 Fitzgerald Road $318,000 $118 6/30/2010 2006 2,690
Southwood 3258 Salinger Way $300,000 $134 6/30/2010 2005 2,237
Southwood 3946 Shumard Oaks Blvd $147,490 $95 6/29/2010 2010 1,551
Southwood 3926 Shumard Oak $149,990 $97 6/29/2010 2010 1,551
Southwood 3934 Shumard Oaks $191,226 $101 6/29/2010 2010 1,889
Southwood 3720 Riverton $174,861 $113 6/29/2010 2010 1,551
Southwood 3716 Riverton $207,188 $110 6/29/2010 2010 1,889
Southwood 3728 Riverton $222,677 $118 6/28/2010 2010 1,889
Southwood 3930 Shumard Oaks $145,000 $93 6/25/2010 2010 1,551
Southwood 3150 Coneflower Drive $336,823 $110 6/25/2010 2010 3,060
Southwood 3922 Shumard Oaks $190,320 $101 6/23/2010 2010 1,889
Southwood 3139 Mulberry Park Boulevard $155,000 $89 6/18/2010 2002 1,744
Southwood 3938 Shumard Oak Blvd $191,565 $101 6/18/2010 2010 1,889
Southwood 3299 Salinger Way $275,000 $121 6/18/2010 2005 2,264
Southwood 3079 Bent Grass $258,000 $124 6/18/2010 2010 2,088
Southwood 3942 Shumard Oak $154,045 $99 6/17/2010 2010 1,551
Southwood 3950 Shumard Oak Blvd $196,754 $104 6/17/2010 2010 1,889
Southwood 3068 Indian Grass $265,000 $127 6/16/2010 2010 2,093
Southwood 4288 Four Oaks Blvd $149,990 $97 6/10/2010 2010 1,551
Southwood 2432 Rain Lily Way $194,000 $139 6/9/2010 2010 1,393
Southwood 3712 Riverton Trail $275,000 $122 6/4/2010 2006 2,251
Southwood 2436 Rain Lily Way $203,145 $128 6/3/2010 2010 1,588
Southwood 3620 Biltmore Avenue $180,000 $127 5/28/2010 2005 1,416
Southwood 2404 Rain Lily Way $206,000 $130 5/28/2010 2009 1,588
Southwood 2468 Lantana Lane $275,000 $120 5/28/2010 2008 2,284
Southwood 4268 Four Oaks Blvd $145,000 $93 5/27/2010 2009 1,551
Southwood 4316 Four Oaks Blvd $189,990 $101 5/27/2010 2010 1,889
Southwood 2440 Rain Lily Way $194,155 $139 5/27/2010 2010 1,393
Southwood 3262 Belle Meade Trail $450,000 $137 5/27/2010 2006 3,279
Southwood 4308 Four Oaks $149,990 $97 5/26/2010 2010 1,551
Southwood 3051 Bent Grass Lane $265,000 $127 5/26/2010 2010 2,093
Southwood 3079 Bent Grass Lane $265,000 $127 5/26/2010 2010 2,093
Southwood 3775 Longfellow Road $305,000 $137 5/25/2010 2004 2,220
Southwood 4296 Four Oaks Blvd $189,990 $101 5/24/2010 2010 1,889
Southwood Xxxx Grove Park Drive $495,000 $198 5/24/2010 2009 2,505
Southwood 4312 Four Oaks Blvd $149,990 $97 5/20/2010 2010 1,551
Southwood 4284 Four Oaks Blvd $151,565 $98 5/19/2010 2010 1,551
Southwood 3252 Thoreau Avenue $360,000 $139 5/19/2010 2007 2,582
Southwood 3632 Biltmore Avenue $222,000 $121 5/18/2010 2006 1,835
Southwood 3075 Bentgrass $263,908 $121 5/17/2010 2010 2,181
Southwood 3100 Mist Flower $344,703 $113 5/17/2010 2010 3,060
Southwood 4300 Four Oaks Blvd $154,875 $100 5/11/2010 2010 1,551
Southwood 3629 Longfellow Road $188,500 $111 5/7/2010 2006 1,695
Southwood 4051 Swift Way $199,900 $141 5/7/2010 2005 1,416
Southwood 4536 Grove Park Drive $695,000 $195 5/4/2010 2006 3,571
Southwood 4292 Four Oaks Blvd $209,577 $111 4/30/2010 2010 1,889
Southwood 3631 Mossy Creek Lane $685,000 $153 4/28/2010 2005 4,467
Southwood 2408 Rain Lily Way $230,000 $110 4/20/2010 2009 2,093
Southwood 3173 Mulberry Park Blvd $133,000 $100 4/15/2010 2002 1,324
Southwood 3972 Grove Park Drive $149,000 $113 4/9/2010 2002 1,324
Southwood 3080 Indian Grass Lane $205,000 $147 4/7/2010 2009 1,393
Southwood 4280 Four Oaks Blvd $210,000 $111 4/1/2010 2010 1,889
Southwood 2420 Rain Lily $217,845 $137 4/1/2010 2010 1,588
Southwood 3760 Overlook Drive $300,000 $130 3/19/2010 2003 2,302
Southwood 3134 Baringer Hill $551,200 $125 3/8/2010 2004 4,400
Southwood 3757 Esplanade Way $192,500 $119 3/3/2010 2003 1,620
Southwood 2424 Rain Lily $208,384 $150 2/26/2010 2010 1,393
Southwood 3731 Four Oaks Blvd. $255,000 $131 2/19/2010 2001 1,954
Southwood 3271 Endicott $485,000 $135 2/16/2010 2009 3,600
Southwood 3245 Dunleith Lane $265,000 $123 2/4/2010 2004 2,156
Southwood 4146 Faulkner Lane $400,000 $132 1/15/2010 2008 3,037

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