This is the final article in a Seven Part Series on the local Real Estate Market. It has been our intention to give you, the buyer, a better understanding of the current Real Estate Market through a combination of historical data and observations from local industry leaders to help you to make better judgments while looking for your next purchase.  Hopefully, this informative series of articles has helped you to understand our economy as it contrasts to other areas of Florida and the country.

We have a great place to live, with a strong economic base that includes state government, two wonderful universities, a continually growing community college, many prosperous small businesses and new enterprises entering the area.  Every day thousands of people are moving to Florida and, over the next ten years, retiring Baby Boomers will significantly increase the population of Florida.  Many will desire to move to the North Florida region rather than flocking further south.  This means that for our region, building out in the next 50 years will mean steadily increasing home and land values, higher prices and smaller lots in areas closer to urban employment and amenities, and a steady influx of residents looking to settle in larger and more affordable “bedroom communities” in Gadsden, Wakulla and Jefferson counties.

Tallahassee offers Floridians a different way of life from other Florida congested metro areas.  With more than a million Americans pouring into Florida each year, Tallahassee appears very attractive to that population.  As our city continues to increase in popularity, so the demand for homes in our area multiplies, keeping a positive upward price momentum in place.  In looking at home closings so far this year as opposed to last year (our hottest Real estate market ever), the facts state that the number of closed transactions Y.T.D. is down a mere 1.23% and up 25% over 2004.  This should give us all reason to be thankful.  Although some Florida locations (e.g., Sarasota and West Palm Beach) experienced recent house price declines, most are currently rising at annual rates of 3.0 to 9.0%.  In Tallahassee, price increases have been less volatile than in other areas of the state. This is likely due to Tallahassee’s stable economy and the lack of dramatic price run-ups that were fueled by speculative non-resident buyers, as experienced in South Florida.
Housing represents the single largest asset category in the net worth portfolio of most households.  Because of its relative value, it plays a key role in shaping the economic condition of individuals and families.  The wealth benefits resulting over time from home ownership can substantially influence a family’s ability to finance education, retirement and other needs.

Home ownership involves wealth building concepts.  The first is the power of compounded growth.  If a home increases in value at a rate of 6% per year, its value will double approximately every 12 years.  Assuming the home was valued at $100,000 in 1982, it would be worth $200,000 in 1994; $400,000 in 2006; $800,000 in 2018; and $1,600,000 in 2030.  This is the power of compounded growth.