Tallahassee Real Estate Market Study Reveals THIS Opportunity Is Ending
One common question that I receive regularly about the Tallahassee real estate blog is "why do you track and publish so much information about the market?"
The answer is simply because a healthy study of history helps to forecast the future. I've been tracking the Tallahassee real estate market for nearly 30 years but only began publishing my findings in 2007. And why do I publish the findings?
It turns out that smart real estate buyers and sellers want any type of advantage that they can get when it comes time to buy or sell a home. Today's post is a classic example of how a buyer can take advantage of an opportunity that appears to be diminishing rapidly. So what is this advantage?
I'll give you a hint. Let's start this post off with the list of townhouses for sale in Tallahassee.
Townhouses For Sale In The Tallahassee MLS
Detached Home Values Versus Attached Home Values
There are three different property types that are tracked under the heading of "home sales," and they include both attached and detached homes. The term "attached" merely means that neighboring homes share a common wall.
The detached homes are commonly called "single-family detached homes," while the attached homes are called townhomes. The final type is condominiums, and this type contains both attached and detached homes, though the majority of condo sales are attached units.
In order to produce a study of home values segmented by attached versus detached, I have pulled all single-family detached home sales and all townhome sales from the Tallahassee MLS and have plotted their averages in the graph below.
Single-family detached home values are plotted in blue while townhome values are plotted in red, both are measured on the left vertical axis. The difference in value between detached and attached homes is plotted with a green dashed line and is reported on the right vertical axis as the "Detached Premium" (the increased value of a detached home).
For this report, value is estimated as the average price per square foot of the homes sold. I have found this to be a good way to track macro value movements over time, though it is not necessarily an effective way to determine the value of an individual property.
So take a long look at the graph and try to figure out the opportunity that it reveals, can you see it?
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Great Deal In The Tallahassee Real Estate Market
Hopefully, you were able to see that the current difference in values between single-family detached homes and townhomes is about 2x its historical norm. If you believe in reversion to the mean (meaning over time, all things revert back to their normal state), then it suggests that buying an attached home today will likely result in a higher appreciation rate than if you buy a similar-sized detached home.
You can see that has been the case for more than ten years, but the trend is starting to return to normal. The current ratio is just under 30% and it likely will drop below 20% over the next five years. Recent history has confirmed that the attached units are truly out-performing detached ones:
- Annual appreciation rate for detached homes since 2012: 4.8%
- Annual appreciation rate for attached homes since 2012: 5.8%
While both rates are well above historical norms, attached home buyers since 2012 have outperformed detached home buyers by an average of 21%, but like all opportunities, this one will not last forever. If you are in the market to buy a home and would consider either type of property, make sure you explore all attached home opportunities before you make your property selection and acquisition.
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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.
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