One of the southeastern US’s hottest housing markets was quietly booming in the shadow of its brighter, louder, and more glamorous sister city Miami.
Tampa, Florida, was ranked as the hottest housing market in 2022 by Zillow (Z, ZG), outperforming other Florida cities as well as other major metro stations such as Phoenix and Austin, Texas. The city has outperformed other markets due to the number of potential buyers, home scarcity, home sales, and a booming job market. Home values in Tampa are also expected to grow at the fastest pace this year.
Melanie Atkinson, a realtor for Smith & Associates, noted that the weather in the Sunshine State is one of the city’s biggest selling points. However, Atkinson told Yahoo Finance Live (the video above), “Tampa has been ignored for many years.”
She added, “People are now just beginning to discover how beautiful the city in general is. We have invested a lot of money to develop cities, both in Saint Petersburg and Tampa. It is really on the map now.”
Tampa’s housing boom comes at a time when the average 30-year fixed-rate mortgage rate is soaring above 5%. Mortgage rates started to rise after the Federal Reserve announced plans to raise interest rates and tighten monetary policy to control inflation. As a result, Fannie Mae expects home prices to jump 10.8% this year and 3% in 2023.
Florida is no longer for sale.
So is Tampa the cheap and charming option to pursue? not exactly.
Shows like Netflix’s “Tampa Sale” have charmed the real estate market by highlighting some of the most beautiful communities and the seamless process of moving to the perfect home. But before you pack your bags at Tampa’s sunny beaches, you should know that the narrative around Florida real estate has changed.
“What people think of as prices in Florida is not what we see now,” Atkinson explained. “Our prices have gone up so much in the past two years that Florida is no longer for sale.”
It is not just housing costs that need to be taken into account but the total cost of living that provides a reality check.
“People come down, they want a deal. It’s not easy to find these things at all. On top of that, we’ve had a lot of changes in our insurance, flood insurance rates have gone up a lot and home insurance rates have gone up a lot,” Atkinson said. Insurance, whether it’s auto insurance or home insurance, in Florida is very expensive.”
The “vicious circle” in Tampa real estate
As if first-time homebuyers didn’t struggle enough, Atkinson said the big companies buying homes for rent are adding pressure to an already tight housing market and pushing rents.
“It’s a really tough time for first-time homebuyers,” Atkinson said. “I wouldn’t lie at all.” “They are competing with the big companies that buy a lot of low-priced properties here to use as rentals. So this vicious cycle goes down, and they have to rent because they can’t find anything, and then they are competing against corporate buyers who then use it to re-rent to the same people who can’t They can find a home.”
The COVID-19 pandemic has also rocked the Tampa real estate market as people seek second homes and new business locations from home.
However, for those looking for a home in Tampa, all is not lost. You may just have to be more creative and adjust your expectations until the Tampa housing market cools down.
Atkinson encouraged first-time homebuyers to “look outside of where you think you might want to live, go a little to the suburbs, and also look at the new construction.”
“We have a lot of builders here who don’t sell to people who buy second homes,” she added. “They only sell to basic homeowners, which is great for those first-time homebuyers. Look at cottages—anything that falls in that lower price range which might not be attractive for big businesses to snatch cash.”
Homebuyers of all kinds, from those buying their first or second homes in Tampa to avid Tom Brady fans hoping to catch a glimpse of the veteran pirate quarterback, can still get a little closer to heaven, albeit with timely and tempered expectations.
Rachel Akufo is a host for Yahoo Finance Live.
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