Tallahassee Housing Market in Great Shape

While some areas in Florida have seen the economy cool and the housing market slip a bit, Tallahassee would not be counted among them. As local real estate experts and builders have been stating for some time, this is an attractive locale for anyone seeking a Florida home loan.

On Tuesday, Stewart Title’s senior vice president and chief economist, Ted Jones, confirmed such beliefs. He spoke before a crowd of over 200 Florida real estate agents, brokers and lenders.

“I’m not worried about your market or home prices,” said Jones.

Stewart Title of Tallahassee sponsored the talk, which had Jones giving an economic outlook on the local and national economy.

He said Tallahassee’s job growth has contributed to its healthy housing market. The city has gained 3,900 new jobs over the past 12 months. Jobs here, he said, are growing at 2.27 percent annual rate. Comparitively, national jobs are growing at a 1.59 percent annual rate.

Jones also expected Florida home loan rates to rise and told his audience to abandon the thought that there’s a housing bubble - at least in the Tallahassee area. But there are “some overheated real-estate markets that will either pop or leak air” such as the housing markets in California and South Florida.

A housing bubble occurs when homes increase in value to the point where they reach an unsustainable level relative to incomes and other economic factors. That is followed by rapid depreciation that can result in a homeowners’ debt-to-income ratio not being sufficient for Florida home loan approval.

A real-estate bubble, he said, exists where there is overbuilding, where interest rates are rising, where there are job losses and in markets that have run out of real estate investors.

None of that fits Tallahassee/Leon County.

In fact, the market here has been faring well. There have been a little more than 3,000 building permits applied for single-family homes over the past 12 months. Jones, who was given information by Florida home loan experts about the Tallahassee housing market, said there is a little more than five months inventory on the market.

Over the past 12 months, 4,707 homes were sold, which means it took agents more than five months to move them off the market. Meanwhile, it took them about seven months to move 464 condos off the market over the same period.

“You’re not overbuilding here,” said Jones.

Nine to 10 months is considered a normal amount of time to move homes off the market, he said. Usually, prices then go down. Homes moved in less than eight months will generally show price appreciation.

“We have a very healthy market here,” said Don Pickett, chairman of the market research and trends committee for the Tallahassee Area Board of Realtors. “Houses are selling well, except when you get up in the ranges over $500,000. There’s a good supply of homes there and it will take a while to sell them.”

Currently, there are 118 homes in northeast Tallahassee, including new construction, priced at $500,000 or more. It will take real estate agents 11 months to sell them. Last year, there were 83 of those homes and it took a year to sell them.

The buyers will likely be baby boomers, people born between 1946 and 1964. That’s because they’re the ones, according to an article in American Demographics, that will inherit $41 trillion from their parents, said Jones.

“And what they are buying,” Jones said, is “real estate, because they don’t trust Wall Street.”

In this case, therefore, a Florida home loan is being considered as a better investment than stocks.