Slowing Population Growth Hampers Tallahassee Housing Recovery
As the State of Florida puts the housing crisis behind it, Tallahassee still struggles to return to its normal rate of home sales.
There are several reasons why Tallahassee trails the rest of the State in the housing recovery, but the primary problem can be stated in a single word.
Fewer People Moving To Tallahassee
The US Census reports that Tallahassee's rate of growth (historically low and slow) has declined since 2000. Fewer people moving here means a decreased need for new homes.
When we compare home sales to the overall population, we find that Tallahassee, on average, sells a number of homes equal to about 2.1% of the size of Leon County’s population.
This measurement serves as a good rule of thumb for what our non-cyclical expectations should be, so when large variances occur, we should look for causation.
The graph below contains some telling information.
The black vertical bars measure annual home sales, while the field of people shows the average population growth each year.
The green line measures the ratio of homes sales to the whole population, and the dashed line shows the 2.1% average over the past 25 years.
The biggest takeaway from this graph is that home sales surged at the same time that our population growth began to decline in 2001, and this partly helps to explain the glut of homes in our market.
Construction slowed as Tallahassee worked through the glut of homes available, only to find population growth slowing even further.
The Tallahassee real estate market will eventually return to levels higher than what we have seen in the past, but new growth and the need for new homes in Tallahassee will always require increased demand, something that comes from growth in our population.
Many people here believe that our reliance on the State and Federal Government jobs needs to shift to the private sector. Regardless of the source, it takes more people (population growth) to fuel the home construction industry.