Capital of The Sunshine State, Tallahassee is a college town full of mossy oaks and award-winning outdoor recreation. The metropolitan area, which includes the city and four surrounding counties, is home to about 390,000 residents and the reputable Florida State University.
In 2015, the average starter home cost was about $48 per square foot. That average has increased 40% to almost $68 per square foot. According to Florida Realtors, the median starter home price in the area currently sits at $185,500, while the median sales price for all homes is about $227,000.
Meanwhile, average Tallahassee rental prices are increasing by about 1.03% each year; not a staggering amount, but they currently sit at around $1,012 for a 2-bedroom unit.
Why Consider Buying Now?
Long term, appreciation is expected to remain steady for the area. In the short-term, however, it seems to have slowed down compared to years prior. Tight inventories aside, this could open the opportunities for renters to enter the market before rates accelerate again.
According to the National Association of Realtors, the value of a typical home in Leon County alone was about $230,900 in Q4 2019. With a 10% down payment, and a 4% interest rate (higher than current rates), they estimate that a buyer would pay about $993 each month for their mortgage — lower than the current rental average costs.
Of course, there’s the added costs of utilities and services. But locking in a low mortgage rate now will keep monthly costs the same, opposed to rent prices that trends are suggesting will continue to increase.
What to Prepare for
Like most markets, Tallahassee’s market is tight. However, with COVID-19 restrictions easing, sellers are looking to place their homes back on the market. Be prepared to act fast, as the time between listing and selling now averages about 21 days.
Nicholas Mihalich, president of the Tallahassee Board of Realtors, suggests buying now as long as you will be in the house for the next 3-5 years. “There is not much lower priced housing being added to the market, so demand will continue to outpace supply,” stated Mihalich. “Consequently, owning a home here is a safe and secure way to build wealth.”
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