Why Homebuyers Will Need To Know The Cost Of New Homes In Tallahassee
If you are planning to buy a home in 2018, you might want to monitor the cost of new homes.
With inventory levels declining every month, new home construction will have a large impact on the 2018 real estate market.
What Does A New Home Cost?
New homes in Tallahassee can be purchased at many price ranges, from millions of dollars for luxury real estate down to below $200,000 for new (or newly renovated) condominium units and townhouses (attached housing).
The graph above compares the average price of all new homes sold versus the average price of all existing home sales each month. Right now, the average new home is selling for roughly 55% more than the average resale, though we are not comparing "apples to apples." Obviously, new homes are likely in much better condition and have many of the new features and amenities that many buyers are seeking, whereas existing homes are typically located closer-in and on far more favorable parcels of land (generalization).
How Healthy Is The New Home Construction Market?
The graph below shows that sales are moving up and they are keeping pace with permits.
The number of new single family detached home permits issued each year is shown in red, while the number of single family detached home sales is shown in green. You can see in the past that when they started moving apart, the market changed dramatically (in both rising and falling markets).
Note also how low permits and sales have fallen. This is part of the reason that the inventory of homes for sale in Tallahassee is so low .... we haven't been building enough of them for the rising demand over the past five years.
Right now, this is a VERY HEALTHY picture for new home sales in Tallahassee, and I would expect that all properly marketed new homes built in 2018 will sell.
Overall Housing Market Health
The real estate market in Tallahassee continues to recover. We are not yet back to levels produced during the housing market bubble, even though the rest of Florida has moved far beyond those figures.
The following graph is a simple device used to monitor the trends in the foreclosures market, and the picture it provides is good.
In the graph above, the blue columns measure the number of new lis pendens filed each month (the start of the foreclosure process), while the red columns record the number of foreclosure sales. The blue line and the red line shows the respective trends of each action, and currently both are on the decline.
Simply put, we have seen the market move from a lis pendens filed for nearly every home sold in 2010 to the current level of one new lis pendens filed for every 10 homes sold. That is a tremendous decline.
Foreclosures have declined from more than 40% of all home sales in 2013 to less than 8% today.
Collectively, these trends show us a market that continues to improve.
So how does this picture of health impact new home sales?
I believe it is the message that banks will need to open up speculative construction loans and built the homes that buyers are awaiting.
Understand Market Conditions Or Waste Good Money
The supply and demand for homes in Tallahassee is something every buyer should grasp. While the overall market conditions are good to know, the specific conditions for one's area and price range are mission critical if you want to save money when you buy a home. Knowing what to offer and how to negotiate are always influenced by the specific market in which one competes, so take the time to be an expert and save your hard earned money.
Of course, you can also choose to work with an expert real estate buyer's agent, one who is solid on current market conditions and who will steer you right, both in property valuation and selection, as well as in negotiation and cost control. We would love to interview to be your agent! Simply give us a call at (850) 366-8917 or drop us a note and we'll be in touch right away. Take a look at what our customers are saying about us!