Tampa is gaining popularity owing to its hot housing market where a number of investors have been putting in their stakes. The rental market is very strong in Tampa Bay. Does it make sense to invest in Tampa real estate now and retire later? Let’s us find out.
Tampa is one of the top locations for buying a rental property in Florida. It’s one of three cities leading the gain in the S&P CoreLogic Case-Shiller National Home Price Index, which is considered the “gold standard” for tracking appreciation. Nationally, home prices rose 3.5% in November 2019. Tampa came third with a gain of 5%.
The Tampa housing market is growing steadily, prices are still low and properties have a good chance for appreciation in the coming years. There is less than two months’ of available inventory – down almost 43% over last year.
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. The home prices are expected to flatten nationwide, increasing by just 0.8%, according to Realtor.com. Tampa properties have a track record of being one of the best long term real estate investments in the U.S.
2017 was an important year for the real estate in Tampa FL as it experienced an 11.1% increase in the housing mostly owing to the growth in employment opportunities. The real estate appreciation rate in Tampa in the latest quarter was around 2.36% which equates to an annual appreciation rate of roughly between 9% to 10%. This can trigger a massive interest in the Tampa real estate investment.
Even small changes in the appreciation rate can change the long-term value of buying considerably. For sellers, a nice profit is on the horizon. There are a number of economic and development prospects attached to this market and Tampa, FL is of the hottest real estate markets in the U.S. in 2020.
Tampa Real Estate Market Forecast 2020 – 2021
Tampa Real Estate is one of the most affordable in the state. It is one of the hottest real estate market for rental homes in the nation. There’s a tremendous amount of pent-up demand for entry level single family homes in the real estate in Tampa FL. What are the Tampa real estate market predictions for 2020? Let us look at the price trends recorded by Zillow over the past few years. Since 2015, the median home prices in Tampa have appreciated by roughly 55.2% from $160,000 to $248,257, according to Zillow’s index.
In the past year, the Tampa real estate appreciated by 4.8%. The latest Tampa real estate market forecast is that the home prices will continue to increase by 4.5% – in the next twelve months. The latest real estate data from Zillow shows that the current median home value in Tampa is $248,257. Tampa is currently a hot seller’s real estate market. The demand is exceeding the supply, giving sellers an advantage over buyers in price negotiations. In other words, there are less homes for sale than there are buyers in the marketplace. Zillow reports that 18.1% of the listings in Tampa had a price cut in Jan 2020.
Here is the Tampa, FL real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of 4.5% till Feb 2021.
Tampa Housing Market Forecast 2021
Here is a short and crisp Tampa housing market forecast for the 3 years ending with the 3rd Quarter of 2021. The accuracy of this forecast for Tampa is 84% and it is predicting a positive trend. The LittleBigHomes.com estimates that the probability for rising home prices in Tampa is 84% during this period. If this price forecast is correct, the Tampa home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
Check this page each quarter for updates to the Tampa Housing Market Forecast.
Tampa Real Estate Market Trends
Analyzing real estate data from multiple sources gives us a much broader perspective of the direction in which a market is moving. We shall now discuss some of the most recent housing trends in the Tampa area from multiple sources and compare it with past couple of years. We shall mainly discuss about median home prices, inventory, economy, growth and neighborhoods, which will help you understand the way the local real estate market moves in this region.
Tampa is a minimally walkable city in Hillsborough County with a population of approximately 335,749 people. In the past ten years, the annual real estate appreciation rate has amounted to 4.89% in Tampa, according to NeighborhoodScout.com. High demand and low inventory is leading to the rise in home prices in Tampa. Currently, the inventory remains low and the prices will continue to rise for the next twelve months.
On average, homes in Tampa, FL sell after 77 days on the market. The trend for median days on market in Tampa, FL has gone down since last month, and slightly down since last year. In a healthy, balanced market, it would take about six months for the supply to dwindle to zero. In terms of months of supply, the Tampa market can tip to favor buyers if the supply increases to more than six months of inventory. However, looking at the current trends, we don’t see things stopping anytime soon. The inventory will decrease further and there may be an increase of 4 to 5 percent in home prices.
Following the housing market decline in 2007, single family rental properties became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate. Single family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units. With 2020 being, theoretically, in the middle of a boom, there’s still 4 years for residential construction to surge. Most likely, a housing shortage will remain in 2020, keeping home prices high.
According to Neighborhoodscout.com, a real estate data provider, one and two bedroom single-family detached homes the most common housing units in Tampa. Other types of housing that are prevalent in Tampa include large apartment complexes, duplexes, row houses and homes converted to apartments. The median house price in Tampa is $217,790, which indicates that home prices in Tampa are well above the national average for all cities and towns in the United States.
Here is a snapshot that shows the median home values in the some of the popular neighborhoods in or around Tampa.
Tampa Real Estate Inventory And Sales Data
Tampa has a mixture of owner-occupied and renter-occupied housing units. January saw 1,250 homes sold with a median selling price of $257,500, up 7.4% over last year, according to Greater Tampa REALTORS. The market is strong, inventory has hit an all time low and return on investment is high.
In the past month, 940 homes have been sold in Tampa on Redfin.com, a national real estate brokerage. Additionally, there were also 548 condos, 466 townhouses, and 49 multi-family units for sale in Tampa last month. The median listing price is around $283,000. The average sale price of a home in Tampa was $260K last month, up 18.5% since last year. The average sale price per square foot in Tampa is $159, up 11.2% since last year.
According their statistics, the Tampa housing market is moderately competitive. Homes sell for about 3% below list price and go pending in around 36 days. A hot listing in the market can sell for around list price and go pending in around 10 days.
Trulia has currently 2813 resale and new homes for sale in Tampa, FL, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The median sales price of homes in Tampa is $247,000 and homes are selling for about $168/sqft.
Currently, there are 1155 homes for sale in Tampa on Zillow, an online real estate database company. Additionally, there are 275 homes for rent. Under potential listings, there are about 37 Foreclosed and 279 Pre-Foreclosure homes. These are the delinquent properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
- The median list price per square foot in Tampa is $192, $199, which is higher than the Tampa-St. Petersburg-Clearwater Metro average of $148.
- The median price of current listings in Tampa is $314,900 while the median price of homes that have been sold is $271,900.
- The median rent price in Tampa is $1,600, which is higher than the Tampa-St. Petersburg-Clearwater Metro median of $1,585.
There are currently 4781 homes for sale and 1430 homes for rent in Tampa on Realtor.com, a real estate listings website. According to their statistics, in February 2020, the Tampa housing market was a balanced real estate market, which means there was a healthy balance of buyers and sellers in the market. Ideally a buyer would prefer a sale to asking price ratio that’s closer to 90%. The sellers in Tampa have managed to hold good leverage in these negotiations in the past month. On an average, they could sell homes for 98.46% of the asking price. A seller would always prefer scenarios which can yield a ratio of 100% or higher.
- In February 2020, the median list price of homes in Tampa was $279,500, trending up 7.5% year-over-year.
- The median sale price was $261,000.
- The median listing price per square foot was $166.
- The median rent price was $1,590.
Single-family detached homes the most common housing units in Tampa. The asking price of single family homes in Tampa can start from $20,000 and can go up to $10.9M for a luxury property located in Beach Park neighborhood. Beach Park is the most expensive neighborhood in Tampa for home buyers who can afford to buy a home in the median price range of $1.25M. East Tampa is the most affordable neighborhood, with a median listing price of $170,500.
|Homes For Sale||4781|
|Homes For Rent||1430|
|Median Listing Price||$279,500|
|Median Sale Price||$261,000|
|Sale to Asking Price Ratio||98.46%|
|New Construction Houses||633|
|Median List Price/Sq Ft||$166|
|Home Price Range||$14K to $10.9M|
|Most Expensive Neighborhood||Beach Park|
|Most Affordable Neighborhood||East Tampa|
Tampa Foreclosures And Bank Owned Homes Statistics 2020
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%.
There are currently 1,293 properties in Tampa, FL that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 1,465. In February 2020, the number of properties that received a foreclosure filing in Tampa, FL was 33% higher than the previous month and 54% lower than the same time last year.
|No. of Foreclosures in Tampa||1293 (RealtyTrac)|
|Homes for Sale in Tampa||1465|
|Median List Price||$269,000 (3% rise vs Jan 2019)|
In Tampa, the zip code with the highest foreclosure rate is 33616, where 1 in every 1206 housing units is foreclosed. 33604 zip code has the lowest foreclosure rate, where 1 in every 1545 housing units becomes delinquent.
Is Tampa a Good Place to Invest in Real Estate?
Now that you know where Tampa is, you probably want to know why we’re recommending it to real estate investors. Investing in real estate is touted as a great way to become wealthy. Is Tampa a Good Place For Real Estate Investment? Many real estate investors have asked themselves if buying a property in Tampa is good investment? You need to drill deeper into local trends if you want to know what the market holds for the real estate investors and buyers 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.
1. Tampa Is Fast Growing 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 a 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.
2. Increasing Tampa Home Prices
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 market is predicted to flourish during 2018.
3. Increasing Tampa Rental Prices
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 basically 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.
4. Job Growth
Job growth in an area is a sure way of boosting its real estate market for both residential and commercial properties. Tampa real estate market has also experienced a similar growth in requirement 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 one of the fastest growing job hubs in the country.
5. Improved Quality of Life
Tampa is one of the fastest growing metropolitans in the US, which suggests that the general quality of life is higher than other comparable cities and towns. It is not only a growing real estate market, 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.
6. Booming Economy
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 way to Tampa for search of better prospects and lesser expenses for running their start-ups. Acquiring residential spaces is one of 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.
7. Tampa Bay’s Tourist Attraction
There are a number of nature parks, landmarks, museums, and eateries for tourists to visit in Tampa. Tourist influx also means increase in short term residential contracts, which is a selling point of Tampa real estate market in 2018. 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 tremendous positive effect on the real estate in Tampa FL.
8. 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.
9. Comfortable Weather
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.
10. Government Facilities
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 with an upgraded quality of life. Not only that, Tampa also hosts a number of entertainment activities for people of all age groups depending upon their tastes.
Investing in Tampa Real Estate: Advice For New Buyers
Maybe you have done a bit of real estate investing in Tampa, Florida 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 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 in the $500,000 to $800,000 range in expensive South Tampa. A 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 a key to your success. If you invest wisely in the Tampa real estate, you could secure your future.
The three most important factors when buying a real estate anywhere are location, location, and location. 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 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.
As with any real estate purchase, act wisely. Evaluate the specifics of the Tampa housing market at the time you intend to purchase. Hiring a local property management company can help in finding tenants for your investment property in Tampa. If it is your first time to invest in Tampa real estate, then you would have to be aware of common beginner’s mistakes. Beginners would usually follow the media, buy a property and wait for its value to increase. This could be risky. Real estate investing requires research. We recommend doing your own research or hiring a real estate investment specialist for guidance.
Other Hot Markets In Florida To Invest In Real Estate
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 a number of 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. The large number of retirees here creates significant demand for medical professionals and caregivers. The horse-centered community offers a number of good paying jobs to trainers, veterinarians and animal caregivers. There are several manufacturers in the area such as mobile home manufacturers and an EMS vehicle maker.
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 strong demand for Lakeland rental homes, especially those that low income residents can afford.
Let Us Help You In Buying Your First Investment Property
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 area, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing and interest rates.
NORADA REAL ESTATE INVESTMENTS strives to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability. Consult with one of investment counselors who can help build you a custom portfolio of turnkey cash flow rental properties in the various growth markets across 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 top real estate growth markets and structuring complete turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.
Remember, caveat emptor still applies when buying a property anywhere. The aim of this article was to educate investors who are keen to invest in Tampa real estate in 2020. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend to do your own research and take help of a real estate investment counselor. 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, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
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