Tallahassee Home Prices Might Just Surprise You
We often get questions about the price of homes for sale in Tallahassee.
It is rare that sellers think prices are high, and just as rare for buyers to think that prices are low.
But you might be surprised to find that Tallahassee home prices are exactly where we expect them to be.
In the graph above, we examine the price of existing homes in Tallahassee (meaning we have eliminated new home sales so that we can isolate the resale market for homeowners).
We have recorded the average single family detached home price each month and calculated the one-year average (solid red line), and we've done the same for the average condominium/townhouse price each month and calculated the one-year average (solid green line).
By using a simplified reversion to the mean analysis for each (dashed lines), we have created anticipated home price forecasts for both single family detached homes as well as for condominium/townhouses.
Single Family Detached Home Prices
When we look at single family detached homes, we see that prices are where they are forecast to be. Sure, there is some wiggle room in the way we've drawn our dashed line, but you can clearly see that home prices appear to be moving higher at a fairly consistent pace when we draw our trend beyond short-term market cycles.
Condominium And Townhouse Prices
We see a completely different story for condominiums and townhouses.
Our dashed line "assumes" the same rate of appreciation for these properties as we observe in single family detached homes.
But current market conditions are clearly not the same for "attached" homes compared to the detached homes.
Right now, it appears that attached homes in Tallahassee are under-priced when compared to prices forecast and expected appreciation rates.
We do have to acknowledge that low liquidity in the condominium and townhouse market creates broad fluctuations as the ebb of and flow of downtown units swings the prices greatly. But we do know this.
Tallahassee Home Price Forecast
The cost of construction has soared when compared to our last growth cycle ending in 2007, so when we eventually need more homes in Tallahassee, they will cost more to build than did those built more than ten years ago.
The supply of existing homes in Tallahassee is dropping, and we're going to start seeing a need for more homes.
Single family detached homes are too costly to produce below $325,000, so Tallahassee will start seeing a higher percentage of attached housing filling the need for home buyers at prices below $300,000.
When you see the above graph in an article a few years from now, do not expect to see the green line at $100,000. It will very likely be pushing towards $200,000.
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