My concern for the health of the Tallahassee luxury homes market has caused me to write several articles lately, and those articles have generated some stimulating questions from readers.
If you read last week?s blog post on high end homes last week, then you know that I believe the market for these homes might be at serious risk to rising interest rates.
But a few readers were not as sure, and one even challenged me with an interesting question.
Do Mortgage Interest Rates Impact The Tallahassee Luxury Homes Market?
As a response to my article stating my concern about the susceptibility of Tallahassee luxury homes to rising mortgage interest rates, I was contacted with this challenge:
Joe, as an owner of a nicer home in Tallahassee, I think you are overly concerned about rising interest rates. Won?t rising rates have more of an impact on the market at lower prices, since most upper end homeowners pay cash?
Well, this is a great question, and one that is not hard to answer.
I went to the tax records and reviewed all arms length home sales purchased in 2012.
I have defined ?Tallahassee luxury homes? as the group of homes that sold for more than $400K, which represents less than 5% of the market.
The real estate graph above shows that 100% of the most expensive homes (over $1M) were funded with cash, while the majority of those purchased below $1M were financed.
So, the answer to our reader?s question might be dependent on how you defined luxury homes in Tallahassee. If we look at home sales over $1M, then 100% paid cash; but if we expand it to include all homes sold over $400K, then the percentage is reduced to just 22% (or roughly 4 out of 5 buyers financing their Tallahassee luxury home).
The Future Of Tallahassee Luxury Homes
So how do you plan for the future if you happen to own one of these Tallahassee mansions?
The answer will depend on your particular situation. But if you believe that graph below is cause for alarm, then you and I are on the same page.
The boom of the market in 2002 corresponded to interest rates dropping below 7%.
I believe that the only reason the market for expensive homes in Tallahassee remains viable is due to the fact that interest rates have been held far below the 50 year average (8.7%). What will happen when rates push back up to normal?
It?s not like Tallahassee has seen a significant change in our economy, or a growth in local wealth.
As we see mortgage interest rates begin to rise again, we will find a market that is heavily over-supplied with expensive homes. There will continue to be pricing pressure on owners of Tallahassee luxury homes for many, many years.
Recent Sales Of Tallahassee Luxury Homes
| Subdivision | Address | Price | Size | Date |
| Southwood | 4126 FAULKNER LN | $455,500 | 2,761 | 31-Oct |
| 29-01N-02E | 7570 SKIPPER LN | $499,000 | 3,510 | 25-Oct |
| 07-01N-01E | 1103 LIVE OAK PLANTATION RD | $620,000 | 4,196 | 23-Oct |
| OX BOTTOM | 7403 OX BOW CIR | $1,050,000 | 8,587 | 15-Oct |
| ROSEHILL | 973 ILEX WAY | $595,000 | 3,928 | 15-Oct |
| GOLDEN EAGLE PLANTATION | 3200 PABLO CREEK WAY | $480,000 | 3,710 | 12-Oct |
| 21-02N-01E | 2792 MILLSTONE PLANTATION RD | $850,000 | 4,175 | 3-Oct |
| GOLDEN EAGLE PLANTATION | 8999 WINGED FOOT DR | $875,000 | 4,662 | 1-Oct |
| SUMMERCHASE CONDOMINIUMS | 4434 GEARHART RD | $415,000 | 1,344 | 27-Sep |
| SUMMERCHASE CONDOMINIUMS | 4434 GEARHART RD | $415,000 | 1,344 | 27-Sep |
| OX BOTTOM MANOR | 444 TALL STAND CT | $455,000 | 3,129 | 26-Sep |
| Southwood | 3243 CAROLLTON DR | $455,000 | 3,760 | 21-Sep |
| BAKER PLACE | 7069 GRENVILLE RD | $425,000 | 3,264 | 14-Sep |
| SUMMERBROOKE | 222 SUMMERBROOKE DR | $400,000 | 3,588 | 14-Sep |
| MILLER LANDING | 2695 MILLER LANDING RD | $656,000 | 3,318 | 13-Sep |
| CORNUCOPIA ESTATES | 7733 HOLSTEINER LN | $412,000 | 3,296 | 7-Sep |
| 16-02N-01E | 7067 STANDING PINES LN | $475,000 | 4,088 | 4-Sep |
| Southwood | 3782 PINEY GROVE DR | $420,000 | 3,054 | 4-Sep |
| BUCKHEAD | 4622 OAKSHIRE CT | $415,000 | 3,948 | 31-Aug |
| GOLDEN EAGLE PLANTATION | 3225 PABLO CREEK WAY | $480,000 | 3,263 | 20-Aug |
| GOLDEN EAGLE PLANTATION | 8314 INVERNESS DR | $418,000 | 2,898 | 17-Aug |
| GOLDEN EAGLE PLANTATION | 8983 WINGED FOOT DR | $452,500 | 2,880 | 7-Aug |
| 06-01S-03W | 19104 TALQUIN DR | $415,000 | 2,766 | 31-Jul |
| 29-02N-01E | 7956 EVENING STAR LN | $685,000 | 4,001 | 31-Jul |
| GOLDEN EAGLE PLANTATION | 9013 SHOAL CREEK DR | $450,000 | 3,064 | 27-Jul |
| GOLDEN EAGLE PLANTATION | 2146 GOLDEN EAGLE DR W | $687,500 | 4,158 | 27-Jul |
| OX BOTTOM | 7213 OX BOW CIR | $500,000 | 3,724 | 27-Jul |
| PINE TIP HILLS | 576 FRANK SHAW RD | $750,000 | 3,230 | 27-Jul |
| PILCKEM RIDGE | 1527 ESCADRILLE DR | $780,000 | 3,958 | 26-Jul |
| RACHEL LANE & CONSTITUTION PLACE | 1316 CONSTITUTION PL W | $685,000 | 4,679 | 25-Jul |
| BOBBIN TRACE | 3798 E MILLERS BRIDGE RD | $585,000 | 3,943 | 23-Jul |
| GOLDEN EAGLE PLANTATION | 2138 AMANDA MAE CT | $440,000 | 3,578 | 17-Jul |
| OX BOTTOM | 8024 EVENING STAR LN | $560,000 | 3,089 | 16-Jul |
| HILLCREST COURT | 909 HILLCREST CT | $525,000 | 4,581 | 13-Jul |
| PILCKEM RIDGE | 1538 ESCADRILLE DR | $740,000 | 4,058 | 13-Jul |
| 13-01N-02E | 11265 TURKEY ROOST RD | $450,000 | 2,819 | 12-Jul |
| ANDERSON HEIGHTS | 322 ANDERSON ST | $405,000 | 2,878 | 12-Jul |
| HIGHGROVE | 4811 HIGHGROVE RD | $415,000 | 2,961 | 6-Jul |
| BUCKHEAD | 4533 TIMBERLOCH DR | $400,000 | 3,119 | 29-Jun |
| BOBBIN BROOK | 3754 BOBBIN BROOK CIR | $600,800 | 3,640 | 28-Jun |
| NORTHAMPTON | 5354 PEMBRIDGE PL | $550,000 | 3,847 | 25-Jun |
| OX BOTTOM | 7316 OX BOW CIR | $800,000 | 4,423 | 25-Jun |
| 29-02N-01E | 2038 CHIMNEY SWIFT HOLW | $465,000 | 3,579 | 22-Jun |
| BUCKHEAD | 4630 FOREST RIDGE DR | $440,000 | 3,153 | 19-Jun |
| VALENCIA HEIGHTS | 223 VALENCIA DR | $800,000 | 2,239 | 15-Jun |
| KILLEARN ESTATES | 4039 KILMARTIN DR | $400,000 | 2,495 | 14-Jun |
| VIEUX CARRE (STERLING HOUSE) | 1487 ST CHARLES PL | $400,000 | 2,605 | 14-Jun |
| GOLDEN EAGLE PLANTATION | 9569 DEER VALLEY DR | $400,000 | 3,264 | 12-Jun |
| BOBBIN MILL WOODS | 3810 BOBBIN MILL RD | $610,000 | 4,144 | 11-Jun |
| 16-02N-01E | 6979 STANDING PINES LN | $515,000 | 3,490 | 8-Jun |
| ROSEHILL | 179 ROSEHILL DR W | $400,000 | 4,591 | 8-Jun |
| KIMBERTON | 3098 SHAMROCK N | $587,500 | 3,780 | 15-May |
| LEXINGTON WOODS CONDO | 2749 PECAN RD | $605,000 | 1,087 | 8-May |
| GOLDEN EAGLE PLANTATION | 9703 PRESTANCIA WAY | $460,000 | 3,268 | 30-Apr |
| 29-02N-01E | 1815 TUSCAN HILL DR | $1,500,000 | 6,815 | 27-Apr |
| Southwood | 3665 MOSSY CREEK LN | $650,000 | 4,441 | 27-Apr |
| WILLIAMS | 748 W LAFAYETTE ST | $600,000 | 3,954 | 26-Apr |
| BOBBIN TRACE | 3867 W MILLERS BRIDGE RD | $735,000 | 4,380 | 23-Apr |
| MALLARD POND | 5269 QUAIL VALLEY RD A | $490,000 | 4,008 | 18-Apr |
| Southwood | 3218 SALINGER WAY | $450,000 | 3,153 | 16-Apr |
| 21-02N-01E | 6949 MCBRIDE PT | $850,000 | 2,472 | 12-Apr |
| 21-02N-01E | 6240 OLD WATER OAK RD N | $540,000 | 3,226 | 12-Apr |
| 21-02N-01E | 6240 OLD WATER OAK RD N | $540,000 | 3,226 | 12-Apr |
| 20-01N-01E | 2800 CLINE ST | $691,900 | 3,476 | 3-Apr |
| GOLDEN EAGLE PLANTATION | 8155 GLENMORE DR | $560,000 | 3,664 | 30-Mar |
| MOORE POND | 6914 HEARTLAND CIR | $650,000 | 3,735 | 30-Mar |
| GOLDEN EAGLE PLANTATION | 2507 DOUBLE EAGLE CT | $740,000 | 4,922 | 29-Mar |
| SOUTHWOOD | 3258 BELLE MEADE TRL | $507,400 | 4,940 | 29-Mar |
| BAKER PLACE | 6934 GRENVILLE RD | $410,000 | 2,998 | 28-Mar |
| Southwood | 3579 MOSSY CREEK LN | $745,000 | 5,140 | 22-Mar |
| GOLDEN EAGLE PLANTATION | 3406 OSPREY RIDGE CT | $465,000 | 3,452 | 15-Mar |
| OX BOTTOM | 1709 EVENING BREEZE LN | $408,000 | 3,551 | 14-Mar |
| WILLIAMS | 721 W LAFAYETTE ST | $400,000 | 1,136 | 7-Mar |
| BETTON HILL | 2115 E RANDOLPH CIR | $670,000 | 4,150 | 6-Mar |
| BETTON HILL | 2230 ELLICOTT DR | $635,000 | 4,282 | 29-Feb |
| BOBBIN TRACE | 3842 E MILLERS BRIDGE RD | $750,000 | 4,674 | 29-Feb |
| BOBBIN BROOK | 4005 BOBBIN BROOK CIR | $515,000 | 3,151 | 24-Feb |
| 27-02N-01W | 2111 MILLER LANDING RD | $490,000 | 1,410 | 21-Feb |
| BOBBIN BROOK | 545 MACLAY RD | $1,250,000 | 5,693 | 16-Feb |
| VIEUX CARRE (STERLING HOUSE) | 1424 VIEUX CARRE DR | $482,000 | 3,109 | 16-Feb |
| 29-02N-01E | 2065 OX BOTTOM RD | $661,000 | 3,462 | 15-Feb |
| ROSEHILL | 209 ARDEA WAY | $475,000 | 2,636 | 9-Feb |
| GOLDEN EAGLE PLANTATION | 3014 GOLDEN EAGLE DR E | $640,000 | 4,152 | 6-Feb |
| BAKER PLACE | 5975 ANSEL FERREL RD | $430,000 | 2,961 | 30-Jan |
| PENNY LANE | 1233 PENNY LN | $700,000 | 4,483 | 27-Jan |
| Southwood | 2565 TWAIN DR | $542,500 | 4,267 | 27-Jan |
| CENTERVILLE | 6000 BROOKFAIR LN | $510,000 | 3,596 | 24-Jan |
| 06-01N-01E | 3511 N MERIDIAN RD | $445,000 | 3,131 | 20-Jan |
| NORTHSHIRE | 8057 TENNYSON DR | $415,000 | 3,673 | 20-Jan |
| MISSION OVERLOOK CONDO | 2299 DEL CARMEL WAY | $1,350,000 | 1,360 | 17-Jan |
| DRAKE | 1532 BELLEAU WOOD DR | $415,000 | 2,671 | 13-Jan |
| GOLDEN EAGLE PLANTATION | 3242 PABLO CREEK WAY | $400,000 | 2,795 | 13-Jan |
| GOLDEN EAGLE PLANTATION | 2132 AMANDA MAE CT | $538,000 | 4,847 | 6-Jan |
| LAKE TOM JOHN ESTATES | 5008 VELDA DAIRY RD | $612,500 | 3,328 | 6-Jan |
If you want more information on Tallahassee luxury homes, just drop me a note and we can schedule a time to study the best options for your specific situation.
Source: http://www.manausa.com/21-years-of-tallahassee-luxury-homes/
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