Tallahassee is currently facing a critical housing shortage, one that could have long-lasting impacts on residents. Despite the city’s growing population, the number of new homes being built has fallen dramatically, currently down 60% compared to the 1980s and 1990s. This sharp decline in new home construction leaves many potential buyers, especially first-time buyers in the housing market, with few affordable options. As home prices rise, many residents are priced out of the market, making homeownership a distant dream for those earning the median income or less. What’s even more worrying is that this problem will only get worse if we don’t address the underlying issues that led to this situation. New construction homes for sale
The lack of new homes: a shrinking market for first-time buyers For years, the number of new homes being built in Tallahassee has been declining. In fact, we are currently building 60% fewer homes than in the 1990s. This trend is highlighted in the graph below, which shows a sharp decline in new construction, especially after 2006, followed by almost flat construction rates in the 2010s and 2020s. 
While Tallahassee’s population continues to grow, the number of homes built simply isn’t keeping pace. Due to the lack of new homes, starters on the housing market have few options. What little inventory is available is increasingly priced out of their reach, with many new homes now in the $400,000+ price range, well above the $150,000 – $250,000 needed for middle-income households. The consequences are clear: first-time buyers are stuck in a market where prices have skyrocketed and the supply of homes they can afford has decreased.
The current decline in home values: a temporary slowdown In 2025, Tallahassee will see a slight decline in home values, a decline of 1.8% year over year. This is shown in the chart below, which tracks the value of homes and their appreciation (or depreciation) over time. While this drop may seem like a relief, it is essential to understand the context. 
This decline in value is mainly due to the recent spike in mortgage rates, which has cooled demand. When interest rates rose above 7%, many buyers were priced out of the market and sellers waited to list their homes. Now that mortgage rates are approaching the high limit of 5%, demand is likely to pick up again. If new home construction does not increase, we could see another increase in prices as more buyers compete for the limited homes available. This could trigger a new cycle of rising prices, putting affordable housing even further out of reach.
The High Cost of Building: Why Builders Can’t Meet Demand The root cause of Tallahassee’s housing crisis is not just the lack of land or limited market demand, but also the rising cost of building new homes. As minimum wages continue to rise in Florida, construction costs have risen dramatically. Builders cannot afford to build homes between $150,000 and $250,000 because the cost of building a new home now routinely exceeds $400,000. In the graph below you can see how the market share for new construction homes in Tallahassee has continued to decline. 
Builders are focused on homes in the higher end – homes in the $400,000+ range because that is where their profits lie. But this leaves a significant gap in the affordable home market, which is essential for middle-income buyers. For those earning the median wage or less, this gap is a significant obstacle. Without more affordable housing being built, many will be forced to rent or move to surrounding counties. Do we really want to drive away the very people who help Tallahassee thrive: teachers, healthcare workers, small business owners and young families?
The need for leadership and action What can be done to solve this problem? The solution lies in the hands of local leadership. Our city’s leadership must work together to address the affordable housing shortage and develop solutions to build homes between $150,000 and $250,000. There are many ways this can be achieved, but as costs rise it becomes increasingly difficult. Additionally, policy changes that reduce construction costs, such as improving access to materials, streamlining permitting processes, utilizing city or county-backed land leasing, and providing incentives to homebuilders, will be critical to bringing affordable housing back to the market. Without these changes, Tallahassee risks becoming a city where only the wealthy can afford to buy homes, and the middle class must rent or leave the city. Local leaders must act quickly to preserve homeownership opportunities for future generations.
Now is the time to act Tallahassee is at a crossroads when it comes to housing. With population growth and a declining construction sector, we face an affordable housing crisis that could get worse if nothing is done. House prices have fallen slightly in 2025, but without an increase in new construction, the housing market is likely to rise again, leaving even more buyers behind. It’s time for local leadership to take action, implement policies to encourage affordable housing, and work together to ensure homeownership remains a possibility for the people who call Tallahassee home.
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