The Tallahassee Area Housing and Real Estate Market

The local market is seeing a decline, and many local buyers now are bargain hunters or folks relocating to Tallahassee, who have compelling reasons to purchase. We are fortunate to have an local economy in Tallahassee that benefits from State Government, and 2 universities and the community college as major employers. Yes, we are affected, but we have the stability of the local economy to soften the blow.

On August 23rd the Tallahassee Democrat quoted John Adams, president of Enterprise Florida at the Tallahassee-Leon County Economic Development Council board of directors' annual meeting: "The sky is not falling. We have got a real soft housing market. This is statewide. This is not a Florida phenomenon," Adams said, adding it is happening in markets around the South and across the country. However, Florida's economy is "still very robust," he said."

According to the Tallahassee Board of Realtors Multiple Listing Service (MLS) there are currently 3461 singe family detached homes on the market in the Greater Tallahassee area, which includes Leon, Wakulla, Gadsden and Jefferson Counties. That is a big inventory. And the chart below (from the MLS) shows we have some issues - Please bear in mind that the 2007 figures are as of Sept 16, 2007, so are not a complete year.

	Total Listed	Num Sold	Pct Sold	Avg List Price Sold	Avg Sale Price Sold	Sale Price/List Price Ratio	Avg List Price Unsold	Pct Expired	Avg Days on the Market Sold
2000	4,822	2,974	61.68%	$141,341	$137,849	97.53%	$182,468	9.42%	95
2001	5,049	3,399	67.32%	$150,771	$147,160	97.61%	$191,491	8.97%	91
2002	5,160	3,442	66.71%	$157,836	$155,071	98.25%	$213,147	7.85%	77
2003	5,180	3,993	77.08%	$181,572	$175,808	96.83%	$246,045	5.42%	64
2004	5,540	4,181	75.47%	$196,619	$194,579	98.96%	$257,867	4.04%	55
2005	6,907	4,572	66.19%	$226,928	$223,971	98.70%	$310,162	3.84%	50
2006	8,030	4,390	54.67%	$245,804	$240,958	98.03%	$315,328	8.72%	68
2007	5,928	2,467	41.62%	$247,715	$240,196	96.96%	$290,322	12.28%	96

Here are some problems - note that the 2007 percent expired column is high - I think that more would sell if pricing were at what I call the "get real price". I bet that many of the expired properties were over-priced. The asking price should not reflect what you think you could have made off the property 2 years ago - it is the price that would cause a buyer to commit today. The percent sold is low, and we have too much inventory!

The sales price ratio to list price is dropping - why - because we are not keeping up with pricing. The low percents sold, the high number of expired listings, and the decreasing sales price to list price ratio, and the increasing days on the market tells me we still have not adjusted pricing sufficiently If prices are dropping nationwide and locally, then the pricing on your property needs to be ahead of the curve to get sold. Standard and Poor's Corporation pricing index shows a drop of 3.2% compared to last year. The median sales price nationally, according to the NAR is $228,900, down 0.6% from a year ago. Days on the market is higher than 2000 for Tallahassee. Remember your economics class, supply and demand? If your house is priced above the recent sales in your neighborhood, there won't be a demand. If it is priced below, well, you might just create demand!

The Greater Tallahassee area (Leon, Wakulla, Jefferson, and Gadsden) will see approximately 6000 new residents per year. According to the Florida Housing Data Clearinghouse population projections the area will continue to grow with 31,1169 more permanent residents from 2005 to 2010. We will see more people new to Tallahassee and Florida, attracted to the strong economic base, our industry and employers, and the great schools and great neighborhoods. We will also see more people coming to the area to find their final home, many from south and central Florida. They want the big city amenities like health care, shopping and the arts, and the small town feel. The Tallahassee area will always be a great investment.

Place	2000	2005	2010	2015	2020	2025
Leon County	196784	217275	241492	264200	285199	303699
Jefferson County	12701	13085	13798	14402	15004	15595
Wakulla County	22084	25485	29898	33900	37798	41398
Gadsden County	43054	44775	46601	48308	50011	51498
	274623	300620	331789	360810	388012	41219

Next: My recommendations for your real estate future...