As Florida’s once-booming real estate market shows signs of cooling, Tallahassee is struggling with the effects of declining home sales. Rising mortgage rates, housing affordability challenges, and a shifting economic climate reshape the market, leaving buyers and sellers navigating uncertain situations.
While major areas like Miami, Tampa, and Orlando continue to dominate Florida’s housing conversation, Tallahassee presents a unique case. As a mid-sized capital city, its market dynamics are influenced by government employment, student populations, and moderate economic growth.
“Here in Tallahassee, there’s not that much land available to build new construction … we have a shortage of homes right now because there aren’t that many places to build, which is why the market is where it is right now,” said Kyle Footman, a Realtor with Coldwell Banker Hartung.
The slowdown in home sales has been due to numerous factors. Locally, an inventory shortage has created an issue for prospective buyers, while rising interest rates have made financing homes less accessible. According to the National Association of Realtors, home sales across the South declined by 16.7% year-over-year as of September 2024.
For homeowners and prospective buyers, the current market presents a double-edged struggle. Some homeowners are reluctant to sell, knowing they may face challenges finding affordable new housing, while first-time buyers struggle to compete in a market with limited options.
“Clients I had back in 2018 that were shopping for homes and decided not to purchase at that time, and now they are back in the market this year, and they wholeheartedly regret not purchasing back then because it was less inflation,’” Footman, a recent FAMU graduate, said.
Economists predict that Florida’s cooling real estate market is part of a broader national trend fueled by increased pressures and tighter policies. However, in Tallahassee, wages compared to rising home prices have intensified the affordability crisis.
“We have a lot of wealthy buyers who come from places out of state with high incomes but high real estate costs, and they come to Florida and find it to be a bargain,” said Florida Realtors® Chief Economist Brad O’Connor. “They are competing with our locals, and Florida does not have as high incomes as other states .. it has been an affordability issue, especially for existing Florida residents. “
City officials and urban planners are paying attention to these challenges, with some exploring policies to address housing affordability and stimulate local development. Efforts being provided aim to provide relief, but the path forward remains uncertain.
“Insurance costs are going up a lot, and homeowners insurance is too expensive, and that’s something they’ve been trying to deal with in Tallahassee … insurance companies were being sued, so we’re hoping that increases competition and will bring insurance companies back to Florida,” O’Connor said.
As Tallahassee adapts to a shifting real estate landscape, the experiences of its residents reflect a broader story of resilience and adaptation. For buyers, sellers, and policymakers alike, navigating this cooling market requires strategic planning and an openness to change.
“We’re in a period of the market trying to stabilize itself. The data shows the market is not crashing … I really think it’s important policymakers and people that can make a difference should not only offer grants for first home buyers but other buyers as well so more people can become homeowners,” Footman said.