The Effects Of New Construction In A Declining Market
Posted by Joe Manausa on Wednesday, June 22, 2011 at 12:35:26 PM
By Joe Manausa / June 22, 2011
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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 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 (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?
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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