The real estate market in the 32309-32301 neighborhoods has experienced many ups and downs over the last six months as home prices have skyrocketed and mortgage rates have fluctuated to meet the economic demand.

Tallahassee realtor and business owner Barry Bevis says “the last six months have been crazy” in the Tallahassee real estate market.

Bevis says this is due to very few homes being on the market and the fact that buyers are still paying at or over list price for housing. 

As of mid-March, Bevis says that in the combined Killearn Lakes and Golden Eagle neighborhoods, only seven homes were on the market, and only two were priced under $300,000.

“That puts prospective buyers in heavy competition,” he said.

At this time, however, “there are a lot of out of area buyers moving here who still think we are an inexpensive place to buy a home,” according to Bevis.

“In the last year, I’ve had buyers come here from Asheville, Nashville, Orlando, New York, Miami, Tampa, Washington, D.C., and Los Angeles,” he adds.

On March 16, the federal government increased its benchmark short-term interest rates by ¼ of a point.

Bevis says that no one knows what’s going to happen with mortgage interest rates, and that they’ll likely have the biggest impact on our market.

“Even 1% increase in mortgage rates has a pretty dramatic effect on the affordability of homes,” he said. “They do not directly correlate with the Fed rate, but can be affected by it.” 

As of March 17, for instance, bank loan rates as part of the mortgage programs at TC Federal Bank were as follows:

• 30-year fixed rate conventional: 4.500%
• 20-year fixed rate conventional: 4.375%
• 15 year fixed rate conventional: 3.625%
• 30-year FHA: 3.875%
• 30-year VA: 3.75%
• 30-year USDA: 3.75%

Bevis added, “And generally, as demand for mortgages drops, interest rates drop to incentivize people into the market. No one believes they can stay this low forever, but it will surprise me if they go up more than 1%. And that is still historically low.” 

Luckily for future homeowners, Bevis says the Tallahassee community can, “expect appreciation to slow over the next year.”

He expects to see a slowdown in both appreciation and sales.