What's New In The Tallahassee Real Estate Market?

I'm really excited to be recording a podcast with Preston Scott today about the current state of the Tallahassee real estate market.

Listen to "Tallahassee Real Estate Market 01/15/18" on Spreaker.

For many people buying and/or selling a home today, it can be a shock to see how much has changed over the past ten years.

It's my goal to provide some clarity on this with today's post and podcast.

As a good way to get the ball rolling, let's take a look at the some of the newest listings in the Tallahassee MLS.

Keeping an eye on the newest listings in the market is a good practice, you'll have a good sense of seller expectations with what they are asking in terms of price for the offering.

For example, when you think sellers are offering crazy-good values, you know the market is getting soft and buyers are at an advantage (think 2012).

The opposite is true too. When sellers appear to be asking a premium for their homes (think 2006), then you know demand is super high and sellers are at an advantage.

Average Home Prices

Home prices continue to rise in Tallahasee.

If you have not been shopping for a home in the past few years, but remember that Tallahassee was grossly over-built and had years' worth of inventory of homes, you need to know that has all changed.

After dealing with a glut of homes for sale from 2006 through 2014, the market transitioned from a buyers' market at most price ranges to a sellers' market at most price ranges.

When we combine the low inventory with the current high demand from buyers, prices are moving higher.

Average Home Values

Just as price have risen, home values have been recovering in Tallahassee since they bottomed in 2012. Homes have appreciated (on average) nearly 21% since market bottom, and early sales in 2018 show they are continuing higher.

When you look at the value trend above, you can see that while values are moving higher, they still have not reached the level recorded at the peak of the housing market in 2006. As a matter of fact, current home values are still 18% lower than they were in 2006.

What many people do not realize about the Tallahassee real estate market is that much of our buying comes from people already in Tallahassee. And nearly half of all buyers have a Tallahassee home to sell first, so when values plunged, it stopped the market.

The people who owned homes and wanted to move found themselves "upside down" on their mortgage and thus were trapped. It has taken many years, but finally a good percentage of those trapped sellers have been able to move.

But with values still 18% lower than the peak of the market, there are still thousands of trapped homeowners who cannot move. As values move higher, they will be freed to do as they please.

Rising values are bringing demand back to the market due to the large number of people who purchased or refinanced their homes from 2005 through 2009.

Home Prices Versus Home Values

Home prices and home values do not always move in the same direction, so we also monitor average home sizes too.

The best way to use the information from the average home price graph and the average home value graph is this:

• Average home prices are what buyers are currently paying for homes - There are many factors that influence prices such as supply and demand, mortgage interest rates, the local economy, etc.
• Average home values are what sellers are receiving for their homes - Values move with supply and demand, so a prudent homeowner keeps an eye on the relationship between the demand for homes and the inventory of homes for sale in the Tallahassee real estate market.
• Average home sizes are what buyers are getting for their money - When prices and values move in opposite directions, then we know that home size trends are changing.

Average Home Sizes

It is interesting to note that home sizes reached their lowest at the peak of the market in 2006 when buyers were buying anying built, and pinnacled in 2012 when sellers couldn't give a home away.

The low cost of money has emboldened buyers, and many have been buying as much home as they could get for the money.

But expect to see average home sizes decline over the next few years. Why?

Because inventory is VERY LOW, and we're going to see new construction take over a higher share of the market. New homes are expensive to build, thus "for the money," they are going to be much smaller than the existing homes that buyers have been purchasing.

Annual Home Sales

Each of the three real estate graphs above includes a count of the number of homes sold each year. You might have noticed that 2017 (at the writing of this report) is showing fewer sales than were reported in 2016. Expect that to change.

We still do not have all December sales included in our report, as there is often a three to four week lag for sales reported at Leon County. We do have all sales reported in the Tallahassee MLS, but I suspect there might be another 150 or so that have yet to be reported. You can come back to this page anytime in the future and these graphs will be updated as new data is received.

Most Recent Home Sales In Tallahassee

The following list shows the most recent 1,000 home sales in Tallahassee, Florida.