Tampa may not be as big a name as Miami or Orlando, but its real estate market is growing at an unprecedented rate. Now is the time to get into this market before prices and interest rates increase. Here’s what you need to know about buying in the Tampa Bay Area in 2021 and 2022:
Why Move to Tampa Bay?
Here are some of the reasons why you should consider moving to Tampa Bay:
Weather: The Tampa Bay Area comes with some of the best weather in the country. Tampa Bay doesn’t really experience traditional “seasons” and instead sees temperatures that range from the low 70s to the high 80s year-round. The good news is that since Tampa Bay is on the coast, it experiences sea breezes that help cool it down and tend to prevent temperatures from running into the 90s.
Activities: Even though Tampa Bay isn’t a top-five tourist destination like Orlando doesn’t mean that there’s nothing to do. In fact, Clearwater Beach has been named the best beach in America several times. There are plenty of golf courses to check out. There are also the theme parks of Busch Gardens and Adventure Island in addition to Zoo Tampa and the Florida Aquarium. Major league sports teams in the area include the Tampa Bay Rays (baseball), the Tampa Bay Buccaneers (football), and the Tampa Bay Lightning (hockey).
Taxes: Living in Tampa Bay often translates into a lower tax burden since the state of Florida doesn’t charge a state income tax. In fact, Florida has the fifth-lowest tax burden in the country with an average rate of 6.82% — broken down into 2.79% in property taxes and 4.03% in sales and excise taxes.
Jobs: While Tampa Bay may not be a “big” city, it still has a diverse and growing job market. The job market saw more than 30,400 private-sector jobs added last year. The largest industries in the market include tourism, health care, finance, insurance, information technology, distribution, logistics, and construction.
Why Invest in Tampa Bay?
The Tampa Bay Area is a great place to invest. But don’t just take our word for it — here are some notable statistics to back it up:
Tampa is a popular tourist destination with more than 24.5 million visitors in 2019 generating $6.9 billion in revenue.
Tampa specifically and Florida, in general, are landlord-friendly locations that don’t have rent control laws or require written leases.
Tampa has been leading the entire state in terms of job growth which is a good indication that the area will continue growing in terms of both home prices and salaries.
Tampa real estate has appreciated 32.42% over the last ten years with an average annual appreciation rate of 2.85%. These impressive statistics put Tampa in the top 20% nationally for real estate appreciation.
These appreciation rates are even higher right now — with a 3.39% appreciation rate in the latest quarter alone with an annual rate of 14.25%.
The Tampa Bay Buyer’s Market
Here are some important statistics and numbers that you need to know about the Tampa Bay buyer’s market — whether you’re looking for an investment property or a primary residence:
The Tampa Bay real estate market is considered “very competitive” by Redfin with a score of 77 out of 100. This means that many homes get multiple offers, some with waived contingencies.
The Tampa Bay Area has a sale-to-list price of 99.8% meaning that these properties get offers at or above listing price.
The median home sales price in Tampa was $325,000 in September 2021 — a 10.2% increase year-over-year.
The median listing home price per square foot was $219.
The typical value of a home in Tampa is $302,156 as of May 2021 according to the Zillow Home Value Index.
On average, properties in Tampa spend about 47 days on the market before being sold. However, the average homes go pending in about seven days.
The Tampa Bay Renter’s Market
Here are some important statistics and numbers that you need to know about the Tampa Bay renter’s market if you’re looking to purchase a rental investment property:
The Tampa Bay Area is considered one of the best locations for buying rental property in the state of Florida.
The average rent in Tampa was $1,451 per month as of May 2021 according to RENTCafe.
Rents in Tampa increased by 7% last year on average.
About 84% of rental units in Tampa have monthly rents that are above $1,001.
The most expensive rental neighborhoods in Tampa include Downtown, Harbour Island, and Uptown with prices around $2,140 per month.
The most affordable rental neighborhoods in Tampa include Lowry Park, Sulphur Springs, and Drew Park with prices that range from $1,106 to $1,129 per month.
Clearwater and Largo were some of the fastest-growing rental markets in the Tampa Bay Area with rents climbing 15.1% and 14.1% year-over-year, respectively.
The Future of the Tampa Bay Real Estate Market
Home values in the Tampa Bay Area are increasing faster than almost any other metro area in the country. However, they are still going to be impacted by a slowdown that’s also occurring in many markets nationwide. While it’s typical to see a slowdown this time of year, it’s also due to buyer fatigue from dealing with such a hot and fast-paced market over the past year and a half.
For example, Pinellas County saw a nearly 13% decrease in single-family home sales compared to the same month last year, Hillsborough County saw an 8% decrease, and Pasco County saw a 3% decrease.
But don’t take this as a sign that you’re now able to offer below asking price on a home you’re interested in. While there may not be dozens of offers on a property these days, you’re still likely to see multiple offers — so you need to put forth competitive offers ideally at list price if you want to beat out the competition and purchase your perfect property.
How to Get Into the Tampa Bay Real Estate Market
Since the Tampa Bay real estate market shows no signs of slowing down in the long term, now is definitely the best time to get into the market before prices continue to rise — along with interest rates. While the Fed hasn’t definitively said when they are going to impose rate increases, 2022 isn’t out of the question. As a result, you should take advantage of record-low interest rates that average around 3% and purchase a home in the Tampa Bay Area.
However, if you’re new to buying a home and don’t really know where to start, it can be difficult to navigate this process on your own. Thankfully, we here at Vaster are here to help guide you through this process with these valuable tips and pointers:
Start with a pre-approval. The best place to start your buying journey is with a mortgage pre-approval. A pre-approval gives you a good idea of what you can afford and will help guide your home search. When it comes to getting a pre-approval, you can either choose to approach lenders directly or work with a mortgage broker. Brokers work with different lenders on your behalf to help secure you the best loan with the best terms. The approach is up to you — just make sure that whichever route you choose, you work with reputable and trustworthy professionals.
Then find a real estate agent. Once you have your pre-approval, you’re now considered a “serious” buyer ready to really begin your home search. An experienced real estate agent can help guide you through a process that can be stressful and overwhelming — especially for first-time homebuyers. Ask family and friends if they have any recommended agents. From there, meet with them and provide them with a list of your “must-haves” and “wish list” items in a new home. At the end of the day, you may have to be flexible in a market as competitive as the one in Tampa Bay.
Find a property and make an offer. With the help of your agent, hopefully, you can find the perfect Tampa Bay property either to call home or invest in. However, these days, finding the right property is the easy part — actually winning it is the hard part. Your agent should be able to help you draft a competitive offer. You may need to be prepared to go above asking price and waive contingencies in order to compete with all-cash offers.