If you have been following the Tallahassee Real Estate Blog over the past few weeks, you know that we have sporadically reviewed some neighborhoods in Tallahassee, and lately have done the first three units in Killearn Lakes Plantation. Today we’ll take a final look at Killearn Lakes, with a review of its 4th unit of homes.
Killearn Lakes Unit 4 is also know as “Grandview” and features homes on lots that range from 1 to 10 acres. As you will see from the following real estate graphs and analysis, home values have held much more stable in this neighborhood than many others in the Tallahassee real estate market.
Average Home Prices In Killearn Lakes Unit 4
The first thing that I noticed when I looked at the existing home sales in Grandview was that the trends were not as seamless as Tallahassee neighborhoods that have more home sales in them. The average price of homes in Killearn Lakes Unit 4 jumps around quite a bit, but look at the average number of homes sold each month (left axis), the number averages below 1 home per month.
Killearn Lakes Unit 4 Home Values Show Slight Decline
Home values in Killearn Lakes Unit 4 (Grandview) are showing a trended decline of 13% since the peak of the market. That is 1/2 of the average decline in Tallahassee home values, so obviously Grandview appears to be doing comparatively well.
All across America this morning, people will be grabbing their morning paper (online most likely) and reading an article that was circulated through the Associated Press about the new home construction industry. As a matter of fact, the article features a picture of a home being built in Tallahassee (and that is how this feed caught my attention).
Unfortunately, the article is grossly misleading. The authors of this article apparently do not consider “supply and demand” in real estate to be a factor that home builders should consider when deciding what to do.
In the real estate equation, the supply side is filled by:
New home builders building homes
Existing home owners selling their home
Banks and asset managers liquidating their inventory
On the other side of the real estate equation, the demand side, is filled by the growing need for new homes from:
Home buyers
Home renters (this is also where we would see home investors)
Glut Of Homes Force Smart Home Builders To Wait
The fact is, there is a glut of homes on the market that is forcing wise home builders to wait for the real estate market to need more houses. The Associated Press article leads us to believe that this is a “shocking new development.”
Construction of homes unexpectedly plunged last month to its lowest point since April, the Commerce Department said Wednesday. The weak figures show that builders still lack confidence that buyers can soak up the glut of unsold homes already on the market — a supply magnified by a record number of home foreclosures.
The real estate market’s glut of homes is not a big surprise. All a home builder has to do is track the inventory of homes on the market and then make a decision on where the entry point will be for his (or her) construction company.
I have heard the rumors, have you? Tiger Woods joins the Tallahassee Real Estate Team At CENTURY 21 First Realty? It’s not enough to hear the rumors, but do we have photographic evidence as well?
Of course, the picture of Tiger Woods could just be the one where he is wearing the victor’s Gold Jacket after winning the Australian Masters golf tournament this past weekend, but who knows….
Speaking of golf tournaments, I was fortunate to play in a charity golf tournament at Golden Eagle on Monday. The tournament was created to support Christmas Connection and our Winning CENTURY 21 team was sponsored by Stan Kupiszewski.
Christmas Connection Serves Basic Needs Of Families
This is the time of year when many great charitable groups are raising money to help people who are down on their luck, or at least less fortunate than many of us right now. Christmas Connection tries to fulfill the wishes and some of the basic needs of hundreds of needy families each holiday season.
Christmas Connection is a non-denominational program organized by Catholic Charities and run primarily through the assistance of volunteers to help the neediest in Leon and surrounding counties. In 2008, recipients of this program (3,148 persons/507 families) were referred by caseworkers from over 40 area agencies. Over 756 volunteers contribued 2,771 hours at the site to meet this goal last Christmas.
How We Can Help The Christmas Connection
Christmas Connection is lucky to have great involvement from the Tallahassee community, and one of its bigger partners is WCTV. I have never been to a Christmas Connection event and not seen Julie Montanero, who gives tirelessly of herself to this great cause.
We can follow Julie’s lead in helping Christmas Connection bring joy to hundreds of Tallahassee families this holiday season.
Some of the different ways that you can help include:
Adopt a Family ~ Fullfill their wish list (Call 850-222-2180)
Donate items for specific people featured on WCTV
Donate Money (send checks payable to Christmas Connection to PO Box 20165 Tallahassee, FL 32316)
Donate New Money or New toys
Donate their “MOST NEEDED” items (food/clothes/heaters/diapers/blankets)
Volunteer at the Christmas Connection Warehouse in December
Help Spread the Word (send a link to this article to everybody on your email lists and ask them to visit the Christmas Connection Web Site)
Spread the news through Twitter by clicking on the Twitter Bird below
As a reminder for those who subscribe to the Tallahassee Real Estate Blog by email, some embedded pictures and videos might not be appearing in your email and you might need to click the title header to go to your browser where all will be visible. Additionally, if you would like to respond (leave a comment) to this article, you will need to “click through” to the blog site to post your feedback.
Joe Manausa is a real estate blogger, a real estate investor and the Broker and Co-Owner of Century 21 First Realty. He can be reached via e-mail through the Tallahassee Real Estate Website or catch his latest writings on the Tallahassee Florida Real Estate Blog , or by calling (850) 386-2001.
Many people are wondering just exactly where this crazy real estate market is heading and how to anticipate its next move. Unit sales have dropped and prices are continuing on a downward spiral.
In the past three years, we have seen a very hot sellers’ market change to a very cold buyers’ market, but many people do not realize that there are five distinct stages that we must move through to transition from a buyers’ market back to a sellers’ market.
After posting yesterday’s Tallahassee Housing Report, I received a comment from a colleague who wanted me to cover this very issue, and she wrote:
Hi there, been doing this since 1981 and do have lots of past and present clients really interested in your wonderful information.
What is hard to convey for me is that even though sales are creeping up a bit, prices are not as far as I can tell. Would you cover this ,in comparing sales increases to prices increases? Thank you, Sandy
Five Stages Of A Real Estate Market Transition
As the market started to cool from a sellers’ market to a buyers’ market, one of the residual side effects was an increased inventory of homes for sale. Home builders and developers, who were previously working at a frantic pace to supply the market with enough homes, missed the tell tale signs of the end of the bull market and kept building more homes.
Now that we have this over-supply (glut) of homes, we must move through the five stages of a real estate market transition before we see home values start to appreciate again. These stages include:
1. Real estate inventory levels stop rising and begin to decline. 2. Home values fall at an accelerating rate. 3. Year over year home sales increase. 4. Real estate inventory levels reach market equilibrium (6 months of supply). 5. Home values stop falling and begin rising.
So, taking these by the number, we can vigilantly monitor our market so that we know where we are, and knowing the five stages of a real estate market transition will tell us where we are going!
The Tallahassee Housing Market is undergoing a pleasant change right now. Most of the key indicators signal that we might be starting a recovery.
Is it due to the fact that we have spent two years selling roughly 50% of the number of homes that our market history sells? Or is it due to the Home Buyers Tax Credit (both the extension of the First Time Homebuyers Program as well as the extension into a program for all)?
I think it most likely is a combination of both of these. I also think it is wise to keep track of what is occurring, as we know that there still exists several reasons why our market is not going to “return to normal” for quite some time.
Pending Home Sales In Tallahassee Continue To Rise
Maybe the most important trend that we can track from the Tallahassee MLS is the daily movement in the one-year trend of pending home sales. These are homes that are “under contract” between a buyer and seller, but have yet to close. Tracking pending home sales allow us a glimpse of what sales activity should look like in the next 60 days. As you can see from the real estate graph below, pending home sales are rising nicely.
Positive Results In Closed Home Sales
While the Pending Home Sales Report show us what is going to happen, the proof comes from the Closed Home Sales Report. The existing news comes from the following report, and the results show that home sales in Tallahassee are finally on the rise.
Home sales in 7 Oaks (Killearn Lakes Unit 3) continue their steady decline from the height of the boom market several years ago. Consisting of 3 and 4 bedroom, single-family detached homes, Seven Oaks has been a very popular family neighborhood in Killearn Lakes for the past 20 years.
This seems to be a fairly consistent theme as we perform more of our Tallahassee Neighborhood Reports, both average home prices dropping as well as signs of roughly 20% depreciation in home values since the top of the market.
Killearn Lakes Unit 3 Home Sales Decline 71%
More and more, we see the number of homes sold in a Tallahassee Subdivision down well over 60%, and in the case of Seven Oaks, home sales are down 71% since the peak of the market. With less than 2 homes sold each month (current trend), it sure is a far cry from when more than 5 homes per month were selling at the beginning of 2007.
Home Values Decline 21% In Seven Oaks
The level of real estate depreciation in 7 Oaks is consistent with the rest of Killearn Lakes in Tallahassee, but it sure is a problem for those of us who live out there. If somebody purchased a home (or refinanced one) at the height of the market in March of 2007, we might have a long way to go before we can sell it and have any equity in the home.
Right now, home values in Killearn Lakes Unit 3 are similar to how they were valued in the beginning of 2004 (meaning most likely you need to have purchased prior to 2004 to have any equity).
A good friend and client of mine asked me to give him a quick opinion on the American Clean Energy and Security Act of 2009 (Cap and Trade Act) and to gauge its impact on the real estate market in the coming years. No big deal I figured, I’ll just grab a beer and see what this thing is all about …
What I found was disturbing. First of all, that beer needed to be a 12-pack, because the American Clean Energy and Security Act of 2009 is a 1,428 page document written in typical political gobilly gook, with far too many words and noticeably void of any pictures. If you’re really bored, you can download a copy from the sidebar on the Tallahassee Real Estate Blog.
Specifically, here are the words found all over the internet that concerned my friend.
You won’t be able to sell your home unless you retrofit it to comply with the energy and water efficiency standards of this Act. H.R. 2454, the “Cap & Trade” bill passed by the House of Representatives, if also passed by the Senate, will be the largest tax increase any of us has ever experienced.
Needless to say, this grabbed my attention and I began looking for more information.
Existing home sales in Killearn Lakes (Unit 2) have dropped 72% from the peak of the market. With home prices historically running about 15% below the average home price in Tallahassee, Unit 2 of Killearn Lakes has been a very popular destination for Tallahassee homebuyers.
So why have existing home sales declined in Unit 2 of Killearn Lakes faster than the rest of the market (existing single family detached home sales are down 62% from the peak of the market)?
I suspect that the declining market has created value buyers (for those who were/are buyers) due to the glut of supply in the Tallahassee real estate market. This suggests that some areas have priced their homes more aggressively than homeowners in Killearn Lakes Unit 2, and that most likely is why home sales have slowed here faster than other areas.
Killearn Lakes (Unit 2) Home Values
Home prices continue to fall in Unit 2 of Killearn Lakes. In the real estate graph below, the red field shows that the average home price in Unit 2 of Killearn Lakes has dropped to $164K, while monthly have sales have fallen to a paltry level of just 2 homes per month.
Average Home Values In Killearn Lakes (Unit 2)
The average home price in Killearn Lakes Unit 2 has dropped 17%, but home values have actually depreciated 19%. The real estate graph below shows the average price per square foot trend of a home in Unit 2 of Killearn Lakes has dropped to $116 per square foot, and continues to trend downwards.
Existing home sales in Killearn Lakes (Unit 2) have dropped 72% from the peak of the market. With home prices historically running about 15% below the average home price in Tallahassee, Unit 2 of Killearn Lakes has been a very popular destination for Tallahassee homebuyers.
So why have existing home sales declined in Unit 2 of Killearn Lakes faster than the rest of the market (existing single family detached home sales are down 62% from the peak of the market)?
I suspect that the declining market has created value buyers (for those who were/are buyers) due to the glut of supply in the Tallahassee real estate market. This suggests that some areas have priced their homes more aggressively than homeowners in Killearn Lakes Unit 2, and that most likely is why home sales have slowed here faster than other areas.
Killearn Lakes (Unit 2) Home Values
Home prices continue to fall in Unit 2 of Killearn Lakes. In the real estate graph below, the red field shows that the average home price in Unit 2 of Killearn Lakes has dropped to $164K, while monthly have sales have fallen to a paltry level of just 2 homes per month.
Average Home Values In Killearn Lakes (Unit 2)
The average home price in Killearn Lakes Unit 2 has dropped 17%, but home values have actually depreciated 19%. The real estate graph below shows the average price per square foot trend of a home in Unit 2 of Killearn Lakes has dropped to $116 per square foot, and continues to trend downwards.
Something positive occurred in the Tallahassee real estate market during the month of October. It was long awaited, yet one month prior to my prediction made earlier this year, so I am very excited to report REAL PROOF of a housing market improvement in Tallahassee.
We finally put a halt to a run of year over year declines in home sales! Previously, the Tallahassee housing market experienced a 39 month run, from July 2006 through September 2009, of year over year home sales declines! October records show more home sales this year than October of last year (242 total home sales this year versus 241 home sales last year).
That’s right, we improved by 1 sale during this October versus last October. As paltry as that sounds, it is something the Tallahassee housing market has not experienced since June of 2006! As small as it is, we have just seen an improvement.
Year Over Year Home Sales Gain In Tallahassee
The real estate graph below shows a year-over-year comparison of Tallahassee home sales. Each month is compared with the same month from the year prior, and the percentage gain (or percentage loss) is recorded for each month. All single family detached homes, condominiums, and town houses sold and recorded in Leon County (arms length sales only) were used for this report.
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All across America this morning, people will be grabbing their morning paper (online most likely) and reading an article that was circulated through the Associated Press about the new home construction industry. As a matter of fact, the article features a picture of a home being built in Tallahassee (and that is how this feed caught my attention).
;)
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