Is This Proof Of Runaway Appreciation For Homes?

As a homeowner, I am happy when home values move higher, but is there a point where it becomes too much of a good thing?As a homeowner, I am happy when home values move higher, but is there a point where it becomes too much of a good thing?

Over the years, we've come to expect "normal" real estate appreciation to be just over 3%, but homes are appreciating much faster than a normal rate. Home values are moving higher fast enough to cause alarm bells to ring, and today's report will show you exactly how the housing market has performed and where we are likely headed from here.

So hold on to your seat, take a look at a few of the median-priced homes for sale in Tallahassee, then prepare to be accurately informed on the changes to the median homes in Tallahassee.

Median Priced Homes For Sale

9 Properties

Proof Of Runaway Appreciation In Real Estate?

When reporting on single-family homes, most real estate reporters combine the sales of single-family detached homes, townhomes, and condominiums. This is useful information, but you seldom see these reports dig into value trends, rather they focus too often on price trends. Also, our report today will use the median home value, rather than merely the average.

The Median Home Value In Tallahassee

The first of four graphs in today's median home report segments the market by property type. The red lines plot the median single-family detached home value, while the solid blue line plots the median townhome value, and the dashed-blue line plots the median condominium value.

Graph plots the median home value over time in Tallahassee

This segmentation is great because most people only own one home. This breaks the market into three separate categories and each homeowner can assess their specific market situation.

What's very clear in this graph is that the value of single-family detached homes and townhomes are soaring higher, while condominium values do not appear to be moving much at all.

Of the three property types, condominiums have the most fluctuation in what falls into the category. As I write this report, there have been 416 condominium sales in Tallahassee this year, priced from as low as $35K for a 700 square foot student rental to as high as $725K for a penthouse unit in the Tennyson in downtown Tallahassee.

Additionally, there have been many units sold in new condominium neighborhoods that look very much like a traditional single-family detached home, but the neighborhoods were set up as condominiums. These are fetching from $300K to over $500K, so they definitely skew the median higher. For this reason, we could see a huge jump in the median condominium value should the number of student rental sales fall below the downtown and new condominium unit sales.

New Versus Existing Homes

This next graph segments the market between new and existing homes, reporting the collective median value for single-family detached homes, townhomes, and condominiums.

Graph plots the median new home value and median existing home value over time

They say that a picture is worth a thousand words, and this graph might be doubly so. Even with no arrows or annotations, I believe we all can see why today's market conditions are nothing like what we saw in 2006 when the housing bubble burst.

Back in the housing market expansion phase from 2003 through 2006, builders were able to bring homes to the market at values many buyers could afford. In fact, they were so affordable that there was very little difference in values between new and used homes. But times change!

The value differential between new and used homes has resulted in the builders not being able to bring homes to the heart of the market, rather they are only servicing the top 20% or so of homebuyers. Existing home values still remain far behind what builders can supply today, so the receding inventory is not being resupplied. There has been a new construction shortage of several thousand homes going back to 2016 when the market hit equilibrium.

Get Our Free Market Update

Weekly Special real estate report covers the Tallahassee real estate market

Other buyers, sellers, lenders, and real estate agents have this critical information, and now you can too!

Get immediate access to our most recent newsletter.

Let more than 30 years of experience work for you with charts, graphs, and analysis of the Tallahassee housing market.

Each Monday morning we send out a simple, one-page report that provides a snapshot of the Tallahassee housing market. It only takes 2 minutes to read, but it gives you better market intelligence than most real estate agents possess. Just tell us where to send it below!

For our readers who want to know what buyers are spending today, the median home price graph below segments the market between new and existing homes.

Median Home Price

Much like we saw with the previous graph, the middle of the market prices are soaring in 2021.

Graph plots the median new and existing home price over time

From 1991 through 2010, the median new-home price and median existing-home price were usually within $50K of each other. But oh how things have changed.

By 2013, the median new home price was nearly double the median existing-home price, making it very difficult for local homebuilders to supply the most active segment of the housing market. With low mortgage interest rates fueling demand and builders not being able to deliver the supply, we've seen the median existing-home price soar. But so too are new home prices.

There are too many underlying factors that suggest the divide between new and used will remain, as inflation and the rising cost of wages have already heavily impacted the market. Couple that with the lack of developed lots and there is plenty of reason to fear the median new home price will push above $400K in the next few years.

Runaway Appreciation In Real Estate

At the beginning of this post, I pondered whether the rapid appreciation of homes was too much of a good thing. I believe the final graph and explanation make it clear that yes, it has been far too much of a good thing.

Graph plots the annual appreciation for homes in Tallahassee

The graph above plots the median home value each year and reveals the impact that the diminished inventory of homes for sale is having on home values. The market has been undersupplied since the end of 2016, so home values continue to move higher at an accelerating rate.

When the year began, I forecast double-double-digit appreciation. Through mid-November, the median home value has risen more than 11% which is an annualized rate of nearly 13%. The demand for homes is approaching the peak market years of 2005 and 2006, but new construction is far lower today than what the market has consumed, so the supply of homes continues to trail demand.

The lack of inventory is only going to increase the pressure on home values. Yes, it's nice to see home values rise, but double-digit appreciation is going to eventually destroy home affordability and convert our market to one of haves and have nots.

The relative supply of homes is stuck near an all-time low, and the bidding wars are making it very difficult to buy a home today. We need builders to step up the production and give the market the homes it needs, all the while paying attention to mortgage interest rate movement which will eventually slow demand.

Joe's Recent Housing Report Videos

Top 10 Tallahassee Neighborhoods
If you want to know where homebuyers chose to live in 2021, then this video was produced specifically for you. Follow along as I share the top-ten selling communities in Tallahassee in 2021, with insight on what it costs to live in each neighborhood as well as the number of homes that sold.
Are Wages Keeping Up With Rising Home Prices
Home prices are rising. Mortgage interest rates are rising. Are people earning enough money to buy homes today, or is the home affordability crisis getting worse?
High-End Homes Market Update
Our high-end homes market update reports the strong rate of luxury home sales, but current trends suggest we'll see the high-end of the housing market cool fast as the rest of 2022 unfolds
Economic Outlook For The Housing Market
Joe Manausa gives an update on the economic outlook for Tallahassee and the US housing market. Includes housing market forecast, housing market activity, and new construction analysis, and reveals how Tallahassee compares with the overall US housing market.
Building Permits Reveal Major Housing Crisis
How do we know there is a major housing crisis brewing? Look no further than building permits! This video examines building permits in detail, as the issue of home affordability is going to become one of the most prominent topics for many years in the national media.
6 Housing Market Rumors Debunked (1 Confirmed)
7 different housing market rumors are perpetuated as “FACT” in various forms of "hype." Discussion of this "housing market news" has been ongoing for years, so today, I want to put them all to rest.
US Housing Market Forecast 2022
Complete housing market forecast for 2022 including data on Population, Mortgage Interest Rates, Jobs (The Economy), New Home Construction, Foreclosures & Forbearances, Supply & Demand, Home Prices, and Rental Rates.
Tallahassee Real Estate Report March 2022
The pace of this video moves fast, and I cover more than ten key real estate trends, so you might want to go back to any graph that you want to spend more time on.
Median Home Price Continues Higher - Home Affordability Declines
If you want to understand how prices and values are moving in the housing market, it starts in the middle. Why the middle? Find out in this video!
Home Ownership Is Radically Different For Millennials
This is a simple millennial housing case study that will clearly show that the millennials will face a housing market like no other generation going back to post-World War II.
Are We Overbuilding Again?
I've been asked recently for my opinion on the number of homes being built in the US. Specifically, people are wondering if the ghost of 2006 has come back to bring more homes to the market than what can be consumed?
Why It's Alway About Supply And Demand In Real Estate
It's all about supply and demand. The real estate supply and demand dynamic tells us everything we need to know to forecast home sales in any given area.
Proof Of Runaway Appreciation In Real Estate?
Over the years, we've come to expect "normal" real estate appreciation to be just over 3%, but homes are appreciating much faster than a normal rate. Home values are moving higher fast enough to cause alarm bells to ring, and today's report will show you exactly how the housing market has performed.
4 Important US Housing Market Trends Impacting 2022
Here’s the thing about forecasts, they require a working knowledge of what consumers face when selling and buying homes. It's these pressure points that I'll share with you as I prepare my forecast for 2022.
Interesting Employment Dynamic Impacts Home Sales
Home sales in the United States are vibrant, and we can look to the economy as a big reason homes are selling. I have found a pocket of data on the Federal Reserve Economic Data website that explains the vitality of the US housing market.
How Soaring Home Prices Are Impacting The Housing Market
Report includes three graphs that show just how far home prices have risen as we move towards conditions where home affordability might become the greatest challenge the housing market has EVER embraced.
Foreclosure Wave? The End Of The Mortgage Moratorium And Forbearance
Many claim a foreclosure tsunami will be the cause of a new housing bubble, yet I believe they are a little short-sighted and I have some evidence that shows this is just not going to happen.
Signs Of A Housing Market Collapse?
When we study the US median market rent, we see signs that paint a clear picture of the future of home prices and home values.
New Versus Existing Home Values Creates Bubble?
New Versus Existing Home Values | Is A New Housing Bubble Forming? Have you noticed the difference between new versus existing home values and wondered is a new housing bubble forming?
Home Affordability Crisis - Major Housing Market Shift
Home affordability is plummeting, and this home affordability forecast explains why real estate prices are becoming less affordable with each passing month.
Homeownership Rate Crash #shorts
60 Second Video: Homeownership is going to decline over the next 30 years, as home affordability hits the worst levels seen since the end of World War II. This is a generational shift in the housing market
Housing Shortage Confirmed: Median Market Rent Explosion
The lack of home builder production has home prices and home values soaring, now look at what's happening to rents too!
Multi-Family Properties - Are They Appreciating Fast Too?
In this video, I discuss the status and market projection of the multi-family homes market. The data I will provide show how multi-family properties compare to single-family homes, market behavior, and how much both have appreciated over the past ten years, comparatively.
How Low Will They GO?
Mortgage interest rates are probably the lowest you will ever see in your lifetime, keeping the demand for Real Estate extremely high!
US Homeownership Rate Crash
Homeownership has been high since World War II, but there is a generational shift in the US housing market that is occurring with two key trends that will soon destroy home affordability and then homeownership in the US.
How Often Do Home Prices Fall?
Are home prices falling? Will house prices fall soon? Home prices are soaring, buyers are having to pay above most sellers' asking prices, and the housing market feels just like a feeding frenzy during Shark Week on the Discovery Channel.
Home Affordability Forecast
Real estate prices are moving higher (faster). This is a real estate forecast you need to see. Many have been misinformed about home prices and the housing market and must watch and internalize the message from this video.
Tallahassee Builders Association Real Estate Outlook
The Tallahassee Builders Association meeting where Joe Manausa gives an update on the real estate outlook in Tallahassee. Includes housing market forecast, housing market activity, new construction analysis, and reveals how Tallahassee compares with the overall US housing market.
Central North Florida Home Sales Report
Average home prices, average home values, and average home sizes in each of the 8 counties of Central North Florida
What Do Low Mortgage Interest Rates Really Mean?
Every article or video about mortgage interest rates conveys that rates are low, but do you really know what it means?
Are Home Sales Sustainable At Today's Pace?
The housing market is hot, but is it too hot? Can we keep selling homes at the rates we're seeing today, or is this a case of what goes up, must come down? The answer to are home sale sustainable can be found with a study of historic home sales rates and population growth trends, allowing us to forecast future home sales.
Here's Where Home Affordability Is Heading
There is a generational shift occurring in the housing market that I reveal in this video. I’m talking about how buying a home over the next twenty years will be unlike what previous generations saw since the early 1980s.
How Low Mortgage Interest Rates Are Shaping The Real Estate Market
Historic low mortgage interest rates are redefining the housing market and we will see the impact of today's mortgages last long into the future.
The Truth About The Housing Bubble Of 2021
Will there be a housing bubble in 2021? - If you look at the most active real estate videos on YouTube, you'll find that the forecast for the next real estate bubble is very popular. Is there a housing crisis and will there be a housing crash in 2021? Or is it just sensationalism that drives people to watch these so-called reports? This video exposes real evidence and I will give you data that tells you everything you need to know about a housing bubble in 2021.

Your Local Expert In Tallahassee

When moving to, in, or from Tallahassee, you will fare better if you work with a local expert. We are here to help. If you have further questions on the Tallahassee real estate market, you can leave a comment below, give us a call at (850) 366-8917, or drop us a note and we'll give you the local information needed to ensure a successful, smooth transaction.

As a local born and raised in Tallahassee with a focus on customer service, I promise you'll find great success when working with Joe Manausa Real Estate, just as have our past customers. You can read thousands of their reviews reported on Google, Facebook and Zillow right here: Real Estate Agent Reviews Tallahassee.

The digital marketing guide for small businessesHave you heard about my new book "The Business of Getting Business?" It's a comprehensive guide for small businesses to help them make the move to digital. For those of us who want to survive and thrive in a world where large corporations are taking over, it is a must-read. It's also the perfect guide for how to sell a home in the digital age. You can find The Business Of Getting Business by clicking on any of the trusted retailers below.

Real Estate Agent reveals in Tallahassee, Florida

Think all REALTORS are alike?

Read what people are saying about working with Joe Manausa Real Estate! You can see thousands of real customer reviews reported on Google, Facebook and Zillow at this link: CLICK HERE FOR REAL ESTATE AGENT REVIEWS.

Post a Comment

(850) 366-8917