Why Newer Neighborhoods Will Struggle More Than Established Neighborhoods In 2012

Weems Plantation is a popular Northeast Tallahassee neighborhood that is undergoing some issues that we have been observing in newer neighborhoods all around Tallahassee.

With home sales happening at a rate less than one half of our normal, we know that a shadow inventory of pent-up supply is growing, and thus so will the list of homes for sale in Weems Plantation. People who want to move but know they owe more on their homes than what is worth are growing in number, and the impact that this will have on neighborhoods in Tallahassee that are less than 15 years old is going to be greater than on those that have been around for a longer period of time. Why you say?

Young neighborhoods have one thing in common for certain. Everybody who owns a home there purchased it in recent years. Nobody who lives in Weems Plantation got there any earlier than June of 1999, and the majority of homeowners in Weems Plantation have been there 5 to 7 years. This means that historically normal, demographically-based movement trends will be causing the majority of homeowners to want to sell their home.

All neighborhoods undergo this phenomenon as they grow out of their infancy, but unfortunately for Weems Plantation and other young neighborhoods, they are going through it during the worst real estate market to hit Tallahassee in a long, long time. I suspect if prices were to suddenly increase by 30% and buyers flooded back to the market (don't hold your breath), we would see a lot of homeowners step out of the shadows in Weems Plantation.

Because of this, there will be an abundance of supply on hand for many years to come. Homeowners who choose to sell a home sooner rather than later, will get the best prices for the next five or more years. The decision for homeowners will be to either sell immediately, or hold the property for 15+ years for the decision to make smart financial sense (I dedicated an entire previous post explaining how to calculate the best "financial" decision on whether to sell or hold).

Weems Plantation Home Prices

The average sales price of a home in Weems Plantation in 2011 has been $157,000, which is down from the $209,000 average in 2006. The graph below shows no signs of the decline happening anytime soon, as the number of homes selling is still at an all-time (12 year) low. Additionally, the three most recent sales have been distressed properties, which makes 2011 the worst year for the percentage of homes sold in distress (33%).

Weems Plantation Home Values

Home values have fallen 23% in Weems Plantation, from nearly $150 per square foot in 2007 to an average of $115 per square foot in 2011 through Mid November. With more short sales and foreclosures hitting the market, we can expect to see further depreciation in Weems Plantation.

List Of Recent Home Sales In Weems Plantation