TALLAHASSEE, Fla. (WCTV) – Veteran realtors like Christie Perkins say it takes a mix of analytics and firsthand experiences to get a real sense of the housing market, which is unique considering Tallahassee’s status as both a capital city and a college town.
Perkins said during COVID, a first-time home buyer paid about $500 less per month than a similarly situated buyer today. Plus, she said Tallahassee and Leon County have continued their reputation of heavy regulation, leaving it difficult for home builders to craft most homes under $300,000.
“But Leon County has a reputation for being one of the most difficult counties in the state to develop in, and thus we are left with people who are willing to put up with it,” Perkins said.
Leon County Commissioner Brian Welch picked up on data from real estate agent Joe Manausa, which showed the lowest-priced homes in Tallahassee rose in price by 43% in the past five years.
Welch called the data “alarming.” The county commission just wrapped up a 4-3 vote late last year to prevent the expansion of urban services near Old St. Augustine Road — a move some county commissioners said stifled growth. In their view, the more new homes that are built, the more folks in starter homes will move up and out.
But, Perkins said, some homebuyers are staying in their starter homes because of low interest rates. She said it’s not just a trend online, as even buyers looking to downsize could see their monthly payments rise as interest rates are about double the 3% seen back in 2020.
Perkins agrees, though, that both the city and county need to cut red tape to build affordable housing. She said most buyers from out of state, like doctors, professors and other professionals, are looking for non-car-centric housing that is walkable or bikeable.
While the Tallahassee area has some of that type of housing, like in Southwood, Perkins said the metro area needs more. She also predicts a less volatile drop in home prices, like the steep drops seen in South Florida.
“So we have a job market that is more stable than your average job market. Will that translate into Tallahassee being exempt completely from these price decreases? I don’t think so,” Perkins said.
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Perkins added that Tallahassee has traditionally been more stable and is one of the few areas in Florida where prices have kept increasing since 2023.
Still, Perkins believes prices will come down slightly in Tallahassee, and if wages can increase and interest rates fall, the capital city will be closer to the 2020 market than today.
Hartung says between retiring state buildings, dealing with Washington Square and selling the old Greyhound bus station, there might be some commercial real estate success downtown… but, Tallahassee has limiting factors.
“As I look back over the years, Tallahassee doesn’t have a demand for larger projects. I think we’re more of a boutique town where smaller projects are more feasible in the marketplace,” said Chip Hartung, the broker-owner of Coldwell Banker Hartung.
Monitoring the homestead exemption
Perkins said state lawmakers will need to take a long look at what type of property tax relief they want to provide. Leon County’s lobbyists have been monitoring various proposals and previously told the commission that the type of tax relief could impact the type of service the government provides.
For renters, Perkins said a large tax cut would be detrimental as landlords would increase rents as local governments tax non-homestead properties to make up for the difference in lost tax revenue.
“That sounds like a really great idea on paper. Unfortunately, that would lead to taxes going up for all investment properties, commercial properties. That means the people who are already struggling to pay their rent are going to see their rent go up even more because we have to pay for schools and everything from somewhere,” she said.
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