Tallahassee Home Prices Are On The Rise Yet Owners Are Losing Equity
Yes, Tallahassee home prices are on the rise, and no there is not a typo in the title of this article.
Many people do not realize that Tallahassee home prices and Tallahassee home values are two very different measurements.
Think of it this way.
When a report references average home prices (lately we have seen number NAR reports saying home prices are on the rise), this is simply a measurement of the average or median home price during a certain period of time.
If ten houses sell for $1.5M, then a report might announce that average Tallahassee home prices are $150K. If next month 10 houses sell for $1.6M, the report could conclude the average price rose $10K in a month.
So average Tallahassee home prices are merely a report of what buyers are spending these days. Due to a better economy or lower interest rates, buyers might be more inclined to "buy up" in the market, and the converse would be true with rising interest rates and a weakening economy.
But do not be confused, prices are not the same as values.
It is highly possible that buyers are willing to spend more, but that does not mean buyers will pay more for a home than they have to, right?
Buyers still want to get the best deal possible when buying a home, so if they have more to spend, won't they just be buying a nicer home?
The fact that average Tallahassee home prices are on the rise means nothing for home values, because home values are still falling.
We have too many homes on the market. We have too many homes that have left the market as failures (The Forgotten Inventory) and not yet returned. And we have too many homes in distress that have yet to enter the market (Shadow Inventory).
Supply and demand in real estate is the same as supply and demand in every other market. Too much supply or too weak demand equals falling values.
Tallahassee Home Prices Versus Tallahassee Home ValuesThe real estate graph below plots the one year trend of both Tallahassee home prices (red) and Tallahassee home values (green).
We can see that there has been no break in trend of falling home values in Tallahassee, but there have been numerous times when home prices have risen for a period of time.
Understanding Tallahassee Home Prices
If you are thinking about selling a home, you must come to grips with the fact that your home is worth less than it was a year ago. In fact, it is most likely worth the same as it was in 2003.
While this is not easy to stomach, it is still a smart time to sell (IF) you are buying back into the market. Many people who are selling are finding that they can purchase a larger home and keep their mortgage payment around the same number as they are paying in their present home (due to lower interest rates).
If you would like to talk strategy for selling your home and moving to a larger/nicer one, just drop me a note and we can schedule a time to evaluate your options. You just might be pleasantly surprised at what you will find with low Tallahassee home prices.