Tallahassee Housing Market Rebounds In First Half Of 2013
It’s a good time to buy a house in Tallahassee—if you have cash or if you’re willing to take on a little risk. Patrick Darden's business is all about weighing risk and reward. He's looking for a diamond in the rough, and he’s found it: in the heart of downtown Tallahassee.
"Assumeably, there’s a home from everybody at the right price," he said.
Darden, a local investor who also owns a property management company, has recently purchased a three bedroom house off North Martin Luther King Blvd. The 1960’s-style cottage sits on a shaded lot, and there’s a big backyard. It’s a quiet neighborhood, not far from downtown. There’s just a tiny glitch: it only has one bathroom.
Still, the purchase price: $55,000, makes this house a bargain. Especially when other homes in the area are selling for twice as much. Darden plans to rent his house for $875 a month: nearly three times what the mortgage would have been had someone scooped it up before he did. Greg Lane, a property appraiser who works with investors, builders, realtors and homeowners throughout the city, says that’s the story of Tallahassee:
“There are so many deals still out there in the market, if buyers can see past the outdated flooring or countertops or appliances, and look at the equity potential they could have in a home and put some work into it.”
He says when it comes to making big purchases many people opt for what’s new and shiny—which also costs them more -- when they could have spent less and earned more over the long run. And some places are just better buys than others:
"I would say the most popular places for people outside Tallahassee ...Northeast Tallahassee corridor...Mahan Road off Buck Lake, and then Southwood," Lane said.
Coldwell Banker’s Don Pickett has been tracking Tallahassee’s housing market for years. And the chart he’s referencing shows a big spike during the first six months of the year. In that time, home sales jumped, and so did the median sale price: up more than five percent to about $205,000. But Pickett says in some places, there are neighborhoods that distort the market:
“Southwood sort of distorts the percentages for the Southeast. The Southwood increase was 10.8-percent: twice as much as the county. It’s a new construction, and so the cost for the new construction is a lot more than it is for resales.”
But people are snapping up properties in all areas of the city, including where Realtor Terence Hinson does business: the Southside. Hinson, who has been running a real estate and property management company for 25 years, says he’s seen lots of growth in that area, especially from parents of college students who want to purchase a place for their kids while they’re in school. But some demographics getting left behind as Tallahassee changes:
"There is a great need in my mind to reconnect with the young urban professional and provide a service for that demographic. The same holds true for seniors. There was a strong push for a while, to make Tallahassee a retirement destination. What happened to that?” Hinson asks.
While every sector of Tallahassee is seeing growth, there are some pockets that local real estate investor Patrick Darden, is downright wary of: College Town.
“Well, I’m conservative, and I see a lot of influx and not necessarily a market."
College Town is the multi-use structure adjacent to Florida State University’s recreation field off of Gaines Street. In addition to College Town, there are also hundreds of townhomes and condos units under construction in the same area – a part of the city which had become a run-down, post-industrial corridor just south of downtown. But Darden sees a problem:
"You have a lot of student condos and residences, a lot of higher end thing that will hopefully get filled, but if there are not enough renters for the areas, you may have an occupancy problem," he said. "But I’m sure the planners have all that on their mind. I just hope they get it executed if the private sector is really interested in investing their money and that it doesn’t flop.”
Because if there aren’t enough students to afford the rents, and College Town does flop, it could drag down adjoining neighborhoods with it.
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