Tallahassee Home Affordability Is Better Than 30 Years Ago
Tallahassee home prices are soaring as demand remains strong while supply continues to dwindle.
As we continued to watch this seller's market strengthen, I wondered how affordable homes in Tallahassee are today versus when I began my real estate career back in 1991.
What I found surprised me. Homes are more affordable in 2020 than they were in 1991 and most of the years in between!
Well-Priced Homes For Sale In Tallahassee
Before we get to the analysis of today's home prices versus those of the past, take a quick look at some of the best-priced homes available in Tallahassee today.
Home Affordability Video
How To Measure Home Affordability
If you are a current subscriber to our newsletter, then you probably saw the recent publication on how home prices and mortgage payments have evolved since 1991. Home prices have risen, interest rates have fallen, and mortgage payments have gone higher (though not nearly as fast as have home prices).
As I was preparing the brief newsletter, it got me thinking about the true change in affordability for homes in Tallahassee. After all, people are earning more money today than they were in 1991, so what if I included a cost of living adjustment (COLA) to the data in order to see if homes were less, equal, or more affordable today than they were 30 years ago.
Fortunately, data for COLA data is available on the Social Security Website, and it allowed me to construct the graph below which shows a thirty-year view of home affordability in Tallahassee.
Keep Up With New Trends In Tallahassee!
Get The Tallahassee Real Estate Newsletter
Don't be the one that doesn't know what's going on when you sell a home or buy a home in Tallahassee.
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.
Tallahassee Home Affordability Graph
The graph above contains the average annual home price (COLA Adjusted) as well as the average monthly mortgage payment each year (also COLA Adjusted). So what exactly is "Cola Adjusted?"
I took the data from the Social Security Administration website on the annual cost of living adjustment and converted it to a base value of "100" for 1991. Each year thereafter I adjusted for COLA changes by dividing the data by an appropriate COLA value and multiplying the result by 100. In other words, each year was adjusted to compare with 1991 based upon the cost of living adjustment.
As a side note, it would be nice to see a similar graph using inflation by adjusting using the Consumer Price Index, but this was a quick and easy method that gives us an interesting view.
So what is the big "ah-hah!" from today's graph?
When adjusted back to 1991 dollars, today's average mortgage payment is $514 per month compared to the $585 per month the average home buyer paid 30 years ago! When adjusted using COLA, today's homebuyer is spending about 12% less than what would have been spent in 1991.
So what do you think? Is the COLA adjustment a fair way to compare 2020 with 1991? Let me know what you think in the comments section below (or send me an email if you like).
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.
Have 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.
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.