A Real Look At Real Estate Depreciation
Real estate depreciation in North Florida shows an average fall of 27% since 2006, but home values have dropped by as much as 67% in one North Florida zip code. The relative supply of homes for sale in our region remains near 18 months, and lackadaisical demand is the largest contributor to our problem.
We have been saying for quite some time (years) that the problem with the demand for housing actually is a supply-side problem, where home sellers are upside down in their homes and have no equity should they want to sell a home and move. Our measurement of home sales in the North Central Florida Region show that unit sales are down a staggering 55% since 2006, and there is little evidence to show that this is going to change in the next few years.
Relative Supply Of Homes In North Central Florida
The following real estate graph shows that even falling supply cannot keep pace with the falling demand for homes in our area. When we take all of the information from the MLS in Tallahassee, we find 18 months of relative supply in following real estate supply and demand graph:
Real Estate Depreciation By Zip Code
By scouring through the sales from the MLS in Tallahassee, I was able to assemble a simple table that shows how each zip code has changed since 2006. For the years 2006 and 2010, I recorded the total number of homes sold (single family detached homes, condominiums, and townhouses), the average price of these sales, and the average value (measured in price per square foot). The resulting change from 2006 to 2010 is recorded in the third section of the chart below:
| 2006 | 2010 | % Change 2006 to 2010 | |||||||
| Zip Code | # of Sales | Avg. Price | Avg. Value | # of Sales | Avg. Price | Avg. Value | # of Sales | Avg. Price | Avg. Value |
| 32301 | 798 | $178,340 | $157 | 193 | $123,265 | $92 | -75.8% | -30.9% | -41.1% |
| 32303 | 1104 | $167,950 | $121 | 469 | $132,370 | $89 | -57.5% | -21.2% | -26.6% |
| 32304 | 368 | $132,671 | $109 | 106 | $87,759 | $70 | -71.2% | -33.9% | -35.8% |
| 32305 | 180 | $143,672 | $112 | 85 | $110,210 | $81 | -52.8% | -23.3% | -28.2% |
| 32308 | 357 | $245,323 | $137 | 179 | $206,917 | $109 | -49.9% | -15.7% | -20.4% |
| 32309 | 493 | $279,287 | $137 | 284 | $230,845 | $109 | -42.4% | -17.3% | -20.2% |
| 32310 | 196 | $148,599 | $116 | 66 | $85,659 | $62 | -66.3% | -42.4% | -46.2% |
| 32311 | 603 | $266,885 | $148 | 274 | $202,142 | $112 | -54.6% | -24.3% | -24.5% |
| 32312 | 642 | $346,579 | $151 | 440 | $254,903 | $115 | -31.5% | -26.5% | -23.8% |
| 32317 | 219 | $277,001 | $144 | 135 | $222,175 | $118 | -38.4% | -19.8% | -18.2% |
| 32322 | 28 | $383,054 | $423 | 23 | $75,935 | $87 | -17.9% | -80.2% | -79.4% |
| 32327 | 521 | $214,957 | $130 | 234 | $140,215 | $87 | -55.1% | -34.8% | -33.0% |
| 32333 | 82 | $204,000 | $119 | 51 | $164,004 | $88 | -37.8% | -19.6% | -26.4% |
| 32343 | 139 | $158,778 | $116 | 43 | $135,325 | $96 | -69.1% | -14.8% | -16.8% |
| 32344 | 71 | $200,605 | $114 | 40 | $205,381 | $91 | -43.7% | 2.4% | -19.9% |
| 32346 | 16 | $521,056 | $382 | 33 | $196,677 | $125 | 106.3% | -62.3% | -67.2% |
| 32351 | 122 | $152,153 | $90 | 48 | $107,834 | $60 | -60.7% | -29.1% | -33.5% |
| Grand Total | 5,939 | $219,493 | $136 | 2,703 | $177,193 | $99 | -54.5% | -19.3% | -27.2% |
This chart shows that the average real estate depreciation in North Central Florida is over 27%, with some zip codes doing far worse than others. Of course, zip codes with fewer sales will see more volatile results (32346 for example had only 33 sales in 2010 and recorded a 67% decline in values), while the results from zip codes with more sales can be viewed with a greater confidence level (32303 had 469 homes sold).
Real Estate Depreciation In 2011
The trend towards real estate depreciation continues in 2011, with year over year results showing an average drop in values of 11% in the North Central Florida real estate market. The one positive sign in this report is that home sales in the Tallahassee MLS were up 13% in the first quarter of this year versus 2010.
| 1st Quarter 2010 | 1st Quarter 2011 | % Change 2010 to 2011 | |||||||
| Zip Code | # of Sales | Avg. Price | Avg. Value | # of Sales | Avg. Price | Avg. Value | # of Sales | Avg. Price | Avg. Value |
| 32301 | 36 | $129,709 | $94 | 41 | $117,810 | $79 | 13.9% | -9.2% | -15.6% |
| 32303 | 73 | $136,476 | $93 | 106 | $109,220 | $76 | 45.2% | -20.0% | -18.4% |
| 32304 | 23 | $86,452 | $70 | 34 | $79,759 | $65 | 47.8% | -7.7% | -7.2% |
| 32305 | 17 | $120,100 | $89 | 26 | $102,281 | $70 | 52.9% | -14.8% | -21.5% |
| 32308 | 35 | $210,239 | $112 | 38 | $239,009 | $112 | 8.6% | 13.7% | -0.1% |
| 32309 | 54 | $246,303 | $112 | 61 | $224,228 | $107 | 13.0% | -9.0% | -4.5% |
| 32310 | 12 | $109,159 | $81 | 23 | $49,826 | $42 | 91.7% | -54.4% | -48.3% |
| 32311 | 38 | $202,491 | $113 | 52 | $208,502 | $104 | 36.8% | 3.0% | -7.5% |
| 32312 | 112 | $232,090 | $112 | 80 | $242,651 | $109 | -28.6% | 4.6% | -2.6% |
| 32317 | 25 | $218,137 | $115 | 29 | $206,491 | $107 | 16.0% | -5.3% | -6.4% |
| 32322 | 1 | $138,200 | $37 | 3 | $105,833 | $73 | 200.0% | -23.4% | 96.8% |
| 32327 | 48 | $165,034 | $93 | 50 | $155,839 | $92 | 4.2% | -5.6% | -0.8% |
| 32333 | 9 | $170,476 | $90 | 11 | $114,127 | $72 | 22.2% | -33.1% | -20.4% |
| 32343 | 14 | $133,879 | $96 | 5 | $124,600 | $92 | -64.3% | -6.9% | -3.9% |
| 32344 | 7 | $334,553 | $116 | 10 | $137,401 | $78 | 42.9% | -58.9% | -33.3% |
| 32346 | 11 | $154,455 | $101 | 12 | $256,425 | $147 | 9.1% | 66.0% | 45.5% |
| 32351 | 7 | $113,400 | $74 | 10 | $93,540 | $47 | 42.9% | -17.5% | -36.5% |
| Grand Total | 522 | $184,054 | $102 | 591 | $164,639 | $90 | 13.2% | -10.5% | -11.0% |
I think these tables show an interesting view of the Tallahassee housing market (and beyond). Note how some zip codes in North Central Florida are appearing stronger (32308) while others seem to be getting hammered (32343). We will add this quarterly "view" of the market to our continued analysis of the Tallahassee real estate market and hope to see great improvements in the quarters and years to come.
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