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Real estate: Why Tampa suddenly has the hottest housing market in the U.S.
Source: Real estate: Why Tampa suddenly has the hottest housing market in the U.S. (yahoo.com)
By: Rachelle Akuffo
One of the hottest housing markets in the Southeastern U.S. has been quietly thriving in the shadow of its brighter, louder, and more glamorous sister city Miami.
Tampa, Florida, was rated 2022’s hottest housing market by Zillow (Z, ZG), beating out other Florida cities as well as other major metros like Phoenix and Austin, Texas. The city outranked other markets due to its number of potential buyers, scarcity of homes, home sales, and flourishing job market. Tampa's home values are also expected to grow at their 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. And yet, Atkinson told Yahoo Finance Live (video above), “Tampa has been overlooked for many, many years.”
Housing on the Garrison Channel in Tampa, Florida. (Photo by: Education Images/Universal Images Group via Getty Images)
She added that "people are now just starting to discover really how beautiful the city is in general. We put a lot of money into growing the cities, both St. Petersburg and Tampa. And it's really just on the map now.”
Tampa's housing boom comes at a time when the average 30-year fixed mortgage rate has climbed above 5%. Mortgage rates began climbing after the Federal Reserve announced plans to raise interest rates and tighten monetary policy to get inflation under control. As a result, Fannie Mae predicts house prices will jump 10.8% this year and 3% in 2023.
'Florida is not on sale anymore'
So is Tampa the cheap and charming option to pursue? Not exactly.
Shows like Netflix’s “Selling Tampa” have glamorized the real estate market by highlighting some of the most beautiful communities and the smooth process of relocating to the perfect home. But before you pack your bags for Tampa’s sunny shores, you should know the narrative about Florida real estate has changed.
“What people think of as Florida prices is not what we're seeing now,” Atkinson explained. “Our prices have gone up so much over the last couple of years that Florida is not on sale anymore.”
It’s not just housing costs to consider but the overall cost of living that offers a reality check.
“People come down, they want a bargain. Those are really not easy to find at all," Atkinson said. "On top of that, we've had a lot of changes in our insurance, and flood insurance rates have gone up a lot and homeowner's insurance rates have gone up a lot. In general, insurance, whether it's car or home insurance, in the state of Florida is very expensive."
'Vicious circle' in Tampa real estate
As if first-time homebuyers weren’t having a hard enough time, Atkinson said large corporations who buy up houses to rent are adding pressure to an already tight housing market and pushing up rents.
"It's a really difficult time for first-time homebuyers. I will not lie at all," Atkinson said. "They're competing with large corporations who are buying a lot of our lower-priced properties here to use them as rentals. So it's this vicious circle of they come down, they have to rent because they can't find anything, and then they're competing against the corporate buyers who are then using them to rent back to these same people who can't find a house."
The COVID-19 pandemic also shook up Tampa's real estate market as people sought second homes and new work-from-home locations.
However, for those searching for a home in Tampa, not all is lost. You might just have to get a bit more creative and adjust your expectations until Tampa’s housing market cools.
Atkinson encouraged first-time homebuyers to "look outside of where you think you might want to live, go a little bit on the outskirts, and also look at new construction."
"We have several builders around here that are not selling to people who are buying second homes," she added. "They're only selling to primary homeowners, which is great for those first-time homebuyers. Look at townhouses — anything that is in that lower price range that might not be appealing for the large corporations to snatch up with 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 quarterback at a Buccaneers game, can still edge a little closer to paradise, albeit with the right timing and tempered expectations.
Rachelle Akuffo is an anchor for Yahoo Finance Live.