The Tampa housing market is growing steadily, prices are still low and properties have a good chance for a strong appreciation in the coming years. Home is selling incredibly fast in the Tampa Bay housing market with hot homes getting multiple offers. There is less than 2-month of the available inventory in the entire Tampa St. Petersburg Clearwater MSA. The current months' supply of inventory is 0.7, down by almost 68% over the last year. This is one of the key factors in rising home prices.
The benchmark for a balanced market (favoring neither buyer nor seller) is 5.5 months of inventory. Anything lower than 5.5 months of inventory is traditionally a sellers' real estate market. The entire Tampa Bay region ranks among housing markets least vulnerable to this pandemic. Tampa Real Estate is one of the most affordable in the state of Florida. It is also one of the hottest real estate markets for rental homes in the nation. There’s a tremendous amount of pent-up demand for entry-level single-family homes.
Following months of bidding wars and over-the-asking-price offers, new sales data released indicated that the pace of Tampa Bay's hyper-competitive real estate market slowed in July. According to Florida Realtors data, Pinellas County saw a nearly 13% decrease in single-family home sales compared to the same month last year. Hillsborough's sales fell nearly 8%, while Pasco's fell about 3%. Hernando County defied the trend, increasing sales by about 1% year over year in July, but all four counties saw declines in sales when compared to June.
Both the sales and prices of single-family homes are rising in double-digits in 2021. The median price of single-family homes has grown by 21.4% to $338K as of July 2021. The Year-to-Date closed sales are up by 13.9%. The dollar volume in July 2021 was $2.0 Billion (+11.5% YoY) and for year-to-date, it was $12.7 Billion (+40.4%), according to Florida REALTORS®. It is simply the sum of all sale prices in a given time period but it is a strong indicator of the health of the real estate industry in a market.
Total cash sales for year-to-date are up by 67% while the percent of Closed Sales Paid in Cash accounts for 28.3% (+47% from last year). This indicates the extent to which investors are participating in the market with many possible exceptions, though. According to local brokers, they are seeing a massive influx of out-of-state cash buyers resulting in soaring prices. The condo market is also doing great. The median sales price was up 18.8% to $223,000. The condo market is even tighter as far as supply is considered. The Months Supply of Inventory is only 0.8.
Tampa Bay Real Estate Market Trends
The residential real estate market in the Tampa Bay area continues to churn unimpeded even in times of the pandemic. Due to the low month's supply of inventory, Tampa is a hot seller’s real estate market – which means that the demand from buyers is exceeding the current supply of homes for sale. The pricing of homes is trending higher and is more attractive for sellers in the current phase. The shortage of supply and an increase in the demand for housing is pushing the prices higher in the Tampa housing market.
The following analysis of the Tampa housing market (includes Tampa-St. Petersburg-Clearwater Metro) has been prepared by Florida REALTORS® with data provided by Florida's multiple listing services. The report compares key housing metrics of the “Tampa MSA” from July 2021 with July 2020. Metropolitan Statistical Area (MSA) reports show housing market statistics that focus on the Tampa Bay Region with a relatively high population density at its core and close economic ties throughout the area.
Tampa Housing Sales (Single-Family Homes)
- Closed Sales declined by -7.2% year-over-year.
- Year-to-Date sales are up 13.9% year-over-year.
- One common measure of tracking investor activity is all-cash sales.
- No. of cash sales were up 71.1%.
- The percentage of Closed Sales during the month which were Cash Sales was 30.7%.
- It shows how active investors are in the Tampa housing market.
- Total Dollar Volume is up 11.5% to $2.0 Billion.
- New Pending Sales are down -12.3%.
Tampa Housing Demand & Prices (Single-Family Homes)
- The Median Sale Price has increased by 21.4% to $338,000.
- The Average Sale Price has increased by 20.1% to $410,530.
- Homes are typically seeing offers accepted faster than a year ago.
- Median Time to Contract is 22 days, down 72.7% year-over-year.
- Median Time to Sale is 66 Days, down -33.3%.
Tampa Housing Supply (Single-Family Homes)
- New Listings are up 15.3% year-over-year.
- In total, new listings have increased by 8% year-over-year (from Jan to July).
- Inventory (Active Listings) is down -27.3%.
- Months Supply of Inventory is 0.9 months, down -40.0%.
- It refers to the number of months it would take for the current inventory of homes on the market to sell given the current sales pace.
- Six months of supply has historically been associated with moderate price appreciation, while a lower level of months' supply tends to accelerate price increases.
In conclusion, we can say that these numbers can be positive or negative depending on which side of the fence you are — Buyer or Seller? It is quite evident that the ongoing pandemic has not had any major impact on Tampa's housing market. About a year ago, a report from ATTOM Data Solutions, a property data company based in California, found that the housing market in most of the counties making up Tampa Bay was among the least vulnerable to the effects of coronavirus.
The two exceptions were Hernando and Polk counties, which fall within the top 60 most vulnerable. Pinellas County was the most resilient to coronavirus effects in Tampa Bay, and Pasco and Hillsborough counties are the next resilient. In July 2021, home sales in the Tampa Bay area saw a decline but the median price rose by over 20 percent.
That's an incredible rate of appreciation in such a huge market with an estimated population of over three million. It indicates that the Tampa Bay area is a strong seller's market. The low mortgage interest rates are helping first-time buyers as far as housing affordability is concerned. The combination of low inventory and low-interest rates is helping sellers to move their properties quickly.
Tampa Real Estate Market Forecast 2021-2022
What are the Tampa real estate market predictions for 2021 & 2022? Let us look at the price trends recorded by Zillow over the past few years. Tampa has a record of being one of the best long-term real estate investments in the U.S. Since Sep 2011, the Tampa-St. Petersburg-Clearwater Metro home values have appreciated by nearly 150.7% — Zillow Home Value Index.
ZHVI represents the whole housing stock and not just the homes that list or sell in a given month. The typical home value of homes in Tamp Bay area is currently $303,374. It indicates that 50 percent of all housing stock in the area is worth more than $303,374 and 50 percent is worth less (adjusting for seasonal fluctuations).
In Sep 2020, the typical value of homes in Tampa was around $243,000. Home values have gone up 25.9% over the past year alone. The Zillow Buyer-Seller Index considers Tampa a sizzling hot seller’s real estate market and predicts that home values will rise in double-digits over the next twelve months. There exists a limited supply of homes in Tampa, and buyers are forced to compete often resulting in higher prices and/or quicker sales that tend to benefit sellers.
In other words, based on the last month’s key housing market indicators, the demand is exceeding the supply, giving sellers an advantage over buyers in price negotiations. There are fewer homes for sale than there are active buyers in the marketplace. Also, in a balanced real estate market, it would take about six months for the supply to dwindle to zero. In terms of housing supply, the Tampa market can tip to favor buyers if the supply increases to more than six months of inventory. And that's not going to happen soon.
The Tampa real estate market remains strong to favor sellers, due to persistent imbalance in supply and demand. The real estate appreciation rate in Tampa in the latest quarter was around 2.38%, which equates to an annual appreciation rate of 9.86%. Relative to Florida, NeighborhoodScout's data shows that Tampa's latest annual appreciation rate is higher than 60% of the other cities and towns in Florida. However, even small changes in the appreciation rate can change the long-term value of buying considerably.
Here is the housing forecast for Tampa and Tampa MSA. The home appreciation has been incredibly strong over the past year.
- Tampa-St. Petersburg-Clearwater Metro home values have gone up 25.9% over the past year and Zillow predicts they will rise 23.7% over the next 12-months.
- Tampa home values have gone up 24.9% over the past year (current = $331,551) and will continue to rise at a similar pace over the next twelve months.
- Hillsborough County home values have gone up 25% over the past year (current = $319,029) and will continue to rise at a similar pace over the next twelve months.
- Pinellas County home values have gone up 28.6% over the past year (current = $317,022) and will continue to rise at a similar pace over the next twelve months.
Here is the visual representation of historical Tampa home prices and the latest forecast until August 2022.
Tampa Bay Real Estate Foreclosure Statistics
Here are some foreclosure statistics of the Tampa real estate market. As per the Tampa foreclosure data by Zillow, the percent of delinquent mortgages in Tampa is 1.3%, which is higher than the national value of 1.1%. The percent of Tampa homeowners underwater on their mortgage is 7.5%, which is higher than Tampa-St. Petersburg-Clearwater Metro at 5.9%. In July 2021, the median sale price of a Foreclosure/REO property in the Tampa metro was $237,000, up 20.3% as compared to last year. The median price of a short sale was $222,000, up 0.9% as compared to last year. There were 15 foreclosure sales and 16 short sales.
Tampa Real Estate Investment: Is Tampa A Good Place For Investment?
Now that you know where Tampa is, you probably want to know why we’re recommending it to real estate investors. Should you consider Tampa real estate investment? Many real estate investors have asked themselves if buying a property in Tampa is a good investment? You need to drill deeper into local trends if you want to know what the market holds for real estate investors and buyers in 2021.
Let’s talk a bit about Tampa before we discuss what lies ahead for investors and homebuyers. Tampa is a minimally walkable city in Hillsborough County with a population of approximately 335,749 people. With a population of more than 4 million, the Greater Tampa Bay area includes the Tampa and Sarasota metro areas. It is not only an attractive metropolitan area but is also one of the most frequently visited tourist destinations. One of the goals of investing in real estate is to get a positive return on the investment when the investor decides to sell the property in the future.
If the appreciation rate is high enough, the extra value of the house in a few years will offset the upfront costs of buying. If the appreciation rate is too low then it won’t. Tampa properties have a track record of being one of the best long-term real estate investments in the U.S. owing to the growth in employment opportunities. This has led to a persistent imbalance between demand and supply. There is a continuing housing shortage leading to a surge in home prices in this region.
Tampa is gaining popularity owing to its hot housing market where several investors have been putting in their stakes. The rental market is very strong in Tampa Bay. It is one of the top locations for buying rental property in Florida. There are several economic and development prospects attached to this market and Tampa, FL is of the hottest real estate markets in the U.S. in 2020.
If you are looking to make a profit, you don’t want to buy the most expensive property on the Tampa real estate market and expect to make a good profit on rents. Perhaps you are looking for a slightly different hold-over, an investment property in Tampa that you might move into or sell at retirement in the future. Either way, knowing your profit potential and purpose is the first thing to consider.
Let’s take a look at the number of positive things going on in the Tampa real estate market which can help investors who are keen to buy an investment property in this city.
Growing Tampa Bay Metro Area
Tampa, Florida is one of the fastest-growing metropolitan areas of the country with a busy downtown area, range of eateries, and tourist attractions. Investors who choose this market will experience high growth in their investments as it is currently one of the hottest grounds for residential and commercial properties. It also offers a great overall quality of life making it a popular residential for many family units. It is not only a growing real estate market, but it is also one of the most popular recreational hubs of the city.
People choose to reside here because of the great prospects of life that it offers, and this directly impacts the Tampa real estate market. The healthcare, education, and transportation facilities in Tampa are also impeccable which is why families with young children and many retirees prefer Tampa and are choosing to reside in Tampa since it offers them an upgraded quality of life. Not only that, but Tampa also hosts several entertainment activities for people of all age groups depending upon their tastes.
Rising Home Prices & Rents
The prices of residential properties in Tampa are growing at a fast pace, though they are still affordable compared to other real estate markets in the country. This is the time for investors to get hold of properties and keep them for some time before selling them at a higher price since Tampa real estate will appreciate them over the next year. Investors can buy properties at lower rates right now and rent them out to new residents of the city to improve their cash flows.
Later on, when the selling price of housing property increases then they can sell out to better prospects. This means that the Tampa real estate market is promising for short-term leases at this point, including rental homes and tourist accommodations. If you only have 10% to put down, a single-family home would be a better option for buying an investment property. It just makes sense when you consider it will be easier to get a loan, and there are no restrictions on rentals.
The Zumper Tampa Metro Area Report analyzed active listings in August 2021 across 7 metro cities to show the most and least expensive cities and cities with the fastest-growing rents. The Florida one-bedroom median rent was $1,371 last month. Sarasota was the most expensive city with one-bedrooms priced at $1,610 while Lakeland ranked as the most affordable city with rent at $930.
The best place to buy rental property is about finding growing markets. Cities like Sarasota & Largo are good for investors looking to get started with rental property ownership at an affordable price. These cities look good for rental property investment this year as rents are growing over there. These trends provide a macro look at the growing rental demand. Each real estate market has its own unique supply-demand dynamics with unique neighborhoods that present their own opportunities for investors.
Here are the best areas to invest in a rental property in the Tampa Metro Area in 2021. Most of these places have the same things in common, including rising rents and increasing property values.
The Fastest Growing Rental Markets in the Tampa Metro Area (Year-over-Year)
- Sarasota had the fastest-growing rent, up 23.8% since this time last year.
- Clearwater saw rent climb 15.1%, making it second.
- Largo was third with rent jumping 14.1%.
The Fastest Growing Rental Markets in the Tampa Metro Area (Month-over-Month)
- Clearwater had the largest monthly rental growth rate, up 5.4%.
- Sarasota rent grew 5.2%, making it second.
- Venice was third with rent increasing 4.9%.
Tampa's Booming Economy
Job growth in an area is a sure way of boosting its real estate market for both residential and commercial properties. Tampa's real estate market has also experienced similar growth in requirements of single and family homes since more people are moving to this flourishing metropolitan area for jobs. The influx of people into Tampa is especially occasioned by the fact that it is one of the fastest-growing job hubs in the country. Tampa has the headquarters of four Fortune 500 companies which makes it a moderately attractive city for work and economic growth.
In addition to this, many entrepreneurs and small businesses are also making their way to Tampa for the search for better prospects and lesser expenses for running their start-ups. Acquiring residential spaces is one of the earliest priorities for such professionals when they move here. Tampa has a very diverse economy with financial services, STEM, health care, research, education, tourism, beaches, and military bases all making significant contributions to jobs and growth.
Tampa Bay's Tourist Attraction
There are several nature parks, landmarks, museums, and eateries for tourists to visit in Tampa. Tourist influx also means an increase in short-term residential contracts, which is a selling point of the Tampa real estate market in 2020. Main tourist attractions include Big Cat Rescue, Busch Gardens Florida, Eureka Springs Park, and Tampa-Bay History Center among many others. Growing tourism has a tremendously positive effect on the real estate in Tampa, FL.
The vibrant living environment of the city owes a great deal to its comfortable temperature. The average temperature is 99 F which is extremely moderate and allows better productivity for human lives. The weather conditions are also an important factor when it comes to motivating people to move here.
Cost of Living in Tampa
Since there is prospective growth in the Tampa real estate market, people from all over the country are considering a move here. One of the most important reasons is the affordable cost of living in Tampa compared to other cities. This has made it a top choice for retirees and small families that are looking for residence and to generally improve the quality of their life.
- Tampa, Florida's cost of living is 5% lower than the national average
- Tampa's housing expenses are 23% lower than the national average and the utility prices are 16% higher than the national average.
- Transportation expenses like bus fares and gas prices are 6% higher than the national average.
- Healthcare in Tampa is 2% lower than the national average.
Maybe you have done a bit of real estate investing in Tampa but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold. Compared to markets in Atlanta, Nashville, and Cleveland, Tampa has higher prospects when it comes to residential and commercial property investments. The Tampa real estate market has been projected to grow steadily during 2020. Investors are recommended to buy Tampa investment properties now and hold on to them until good price appreciation for maximum return on investment.
The Tampa housing market has been seeing constant development for the last two years, a trend that does not seem to be stopping any time soon. Realtor.com had rated the top 100 markets according to factors including employment growth, household growth, and unemployment. In all categories, the Tampa real estate market fares considerably better than the national average. The one category in which Tampa FL real estate market especially shines is new-home starts, predicted to soar by more than 20 percent next year. That would ease one of the biggest constraints on the local real estate market – a shortage of homes for sale.
The biggest demand will continue to be for “moderately priced homes” — those under $300,000 in most places but the $500,000 to $800,000 range inexpensive South Tampa. Good cash flow from Tampa investment properties means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding a good Tampa real estate investment opportunity would be key to your success. If you invest wisely in Tampa real estate, you could secure your future.
The three most important factors when buying real estate anywhere are location, location, and location. The location creates desirability. Desirability brings demand. There should be a natural and upcoming high demand for rental properties. Demand would raise the price of your Tampa investment real estate and you should be able to flip it for a lump sum profit.
The neighborhoods in Tampa must be safe to live in and should have a low crime rate. The neighborhoods should be close to basic amenities, public services, schools, and shopping malls. Some of the best neighborhoods in Tampa, Florida are Old Seminole Heights, Sun Bay South, Tampa Palms, Spring Hill, Tampa Heights, Oldsmar, Grand Hampton, Davis Islands, Palma Ceia, Ybor City Historic District, Parrish, South Tampa, Hyde Park, Tampa Palms, Westchase, Temple Terrace, Riverside Heights, and New Tampa.
Apart from the Tampa real estate market, you can also invest in another hot market in Ocala, Florida. Ocala is an affordable real estate market for investors who can still reap a decent return on investment. The area has recovered from the Great Recession, and several factors will insulate it from a future downturn. The Ocala housing market is buoyed by several nearly recession-proof industries. It is quite affordable for investors compared to the rest of Florida markets like Tampa where the median home value is $221,500. The median home price in Ocala is $163,179. You can buy several homes in the Ocala FL real estate market for the price you would of one mid-market condo in Miami.
Also, given that this is Florida, it shouldn’t be surprising that retirees are a disproportionately large source of demand for Ocala rental houses. A large number of retirees here creates significant demand for medical professionals and caregivers. The horse-centered community offers several good-paying jobs to trainers, veterinarians, and animal caregivers. There are several manufacturers in the area such as mobile home manufacturers and EMS vehicle makers.
Another market that we suggest is the housing market in Lakeland, Florida. The Lakeland FL real estate market presents the perfect balance of currently affordable real estate for buyers and future growth. We can expect the population of the area to grow rapidly, and the renting population will grow even faster. The time to buy real estate in Lakeland is now. While the Lakeland FL real estate market is cheaper than Orlando and Tampa, it is not a good overall value given the lower average wages of its residents.
That explains why U.S. News and World Report gave the city an index score of 5.5 out of ten. This is due to the average resident earning around $23,000 a year, several thousand less than the U.S. average. Median household incomes are no better. The median household income in Lakeland, Florida is around $40,000, more than ten thousand dollars below the national average. This creates a strong demand for Lakeland rental homes, especially those that low-income residents can afford.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Tampa, Florida.
Consult with one of the investment counselors who can help build you a custom portfolio of Tampa turnkey properties. These are “Cash-Flow Rental Properties” located in some of the best neighborhoods of Tampa.
Not just limited to Tampa or Florida but you can also invest in some of the best real estate markets in the United States. All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Tampa turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.
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Remember, caveat emptor still applies when buying a property anywhere. Some of the information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
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