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IS NOW THE TIME TO BUY A HOME?

By
Real Estate Agent with Coldwell Banker Hartung & Noblin, Inc

I have been a Realtor since 1980 and over a long period in my real estate career this was an easy question to answer.  During the late 1980's and 90's, you could expect an average of about a 3% increase in your home value per year depending on the location, condition, year built , etc.  Beginning in 2003, this all changed with an artificial rise in residential prices; not values.  Based on the sales prices of homes today, the real value of your home now is more closely aligned with home prices in 2002.    

 

"I WISH I HADDA......"  Or another way of putting it "Hind sight is 20-20".   In the late 90s and prior to the recent drop of real estate values, I often heard people say I wish I'd bought some beach property back in the 1980's and 90's.  Given the realities of today's economy, we know that the prices of beach properties have gone down.   But, looking back, we can all wish we would have taken advantage of opportunities in purchasing real estate.  The secret is knowing when to buy.  No one really knows what tomorrow has in store for us.  However, like a weatherman making predictions based on their indicators and experience, we can likewise make some educated projections. 

 

Our Tallahassee Metro Area (TMA - 5 surrounding counties)  median sales prices have done much better than the rest of the State of Florida averages.  In our area, we are staying close to the National averages.  Just a little refresher; the "median price" is half way between the lowest and the highest price.  The "average price" is just that, the average.  In 2009 the TMA average "resale homes" sold price was $198,719 and the median was $174,700.   Our median sales price has been about the same as the National median at $175,000 for the past eight months and the State-wide has been below $150,000.  In January there was the usual dip in the number of sales as in previous years with an upturn expected in March.  While this dip was 16% less than in 2009, our median sales price was 12% higher, which was the highest increase in the State of Florida.

 

In December 2008 in Leon County there were 4 single family homes with 1400 to 1600 square feet, 2 car garage and no pool that sold for an average price of $172,000.  In July 2009 there were 27 like homes that sold for an average price of $179,000 and in December, 2009, 14 homes sold for an average price of $186,000........that is an 8% increase in 1 year!  This is a VERY POSITIVE sign for our Tallahassee real estate market.  KEEP IN MIND that this is not an across the board increase.  For 2008 in Leon County (not the TMA) there were 1850 single family homes that sold with an average sales price of $242,600 and a median sales price of $203,500.  In 2009, 1802 single family homes sold at an average price of $216,800 (10.6% decrease) and a median price of $185,000 (9% decrease).  So why the huge difference between the overall single family home decrease and the 8% increase in the model of a home described above?  In 2009, 57% of all the homes sold in Leon County sold for an average price of no more than $200,000.  A 3 bedroom, 2 full bath home with a 2 car garage, under $200,000 is the most popular home model.

 As to why the Tallahassee area has faired much better than most parts of the State, I think of two primary reasons.  One is our job base with the Capitol, FSU, FAMU, TCC and numerous other institutions' of education beyond high school.  Second is that Tallahassee, although a great place to live with a wealth of attractions to enjoy, is not considered a major tourist destination with a high demand of resort type real estate such as Naples and Destin where the bottom fell out, leaving a huge inventory of homes clogging the market.

 So........is it time for you to buy a home?  The Tallahassee home market is relatively stable with homes priced below (approximately) $300,000.  Homes in this price range are, as a rule priced fairly.  Mortgage interest rates are at record lows.  However, are the rates going to stay this low for long?  With several indicators pointing to market stabilization, it's very possible that interest rates will begin to rise.  If not soon, the only way they will go is up, eventually.

 So if you are waiting for the prices to come down......you just may be losing out, not only with a possible higher mortgage payment with a higher home price, or even a lower home price with a higher interest rate; but,  the joy of owning your own Home.