Tampa Real Estate Market Guide for 2022 & 2023

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The third-most populated city in Florida, Tampa is well-known for its tropical weather, amusement parks, and other tourist attractions. Tampa is the largest city in the Tampa Bay area and has a rich and diverse local music and food scene. The Tampa real estate market was named the hottest in the country in 2022 by Zillow.

With the burgeoning economy and the increase in job opportunities in the city, Tampa’s housing market seems poised to repeat its unprecedented performance in 2021. The Tampa housing market can be a bit tricky to navigate. These predictions and stats can help you make an informed decision about buying or selling in the state of Tampa.

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    About the 2022 Tampa Real Estate Market

    Home values in Tampa increased by 34.9% last year. Home prices have been rising since the early months of the Covid-19 pandemic and they show no signs of coming down. According to a report by Redfin, investors purchased 18.4% (about 80,000 in total) of all US homes that sold in the fourth quarter of 2021. That shows an increase in investor demand for houses in the US housing market and a corresponding increase in home values.

    Metropolitan areas such as Tampa Bay are attracting even greater attention from investors. Investors accounted for 24.2% of home purchases in the Tampa, Florida metro area, a substantial increase from 52.3% increase from the previous year.

    The Tampa housing market remains strong for sellers in 2022, with inventory considerably lower than the demand for it. Homes sell fast and for more than the initial bid price. Realtor.com reports that houses in Tampa are sold after an average of 46 days on the market. The median listing price of a home in Tampa is $389,000. Therefore, investors who wish to buy homes in Tampa need to be creative in order to outbid their competition.

    Is Tampa a hot real estate market?

    Yes. Tampa is one of the hottest real estate markets in the US right now. Homes in Tampa are steadily increasing in value. Demand is rising and homes are receiving multiple offers. Tampa’s housing market also presents a safety net for long-term investors, due to growing employment opportunities.

    Is Tampa in a real estate bubble?

    During a real estate bubble, prices rise so high that demand falls drastically as houses become unaffordable, leading to a crash in home values. There is currently no Tampa real estate bubble since housing demand in Tampa is still very strong.

    Tampa’s home values are steadily rising, but market demand is not slowing down due to the inflow of out-of-state buyers. 64% of housing experts and economists surveyed by Zillow stated that they do not believe that the housing market is in a bubble. In contrast, 8% of respondents claimed to be unsure.

    A market slowdown in the Tampa real estate market in 2022/2023, or on a larger scale, a recession, seems more likely than a housing market crash.

    Is Tampa Real Estate a Good Investment?

    Yes. Tampa real estate has proven to be a safe and reliable investment over the years, and this will likely be the case for a long time.

    Tampa real estate is an investor magnet

    Tampa Bay has seen a surge of investment in its housing market. Investors are looking to take advantage of its rising prices, established track record as a profitable market, and Tampa’s overall landlord-friendliness.

    The increase in employment opportunities and the growing population in Tampa is expected to drive up the demand for real estate. The quality of life and the relatively low cost of living are major drivers of population growth.

    Florida is generally a landlord-friendly state. Rent control isn’t enforced and landlords are mostly free to set their own rental guidelines

    Popular tourist destination

    Tampa Bay is home to many famed tourist attractions such as Ybor City, Clearwater Beach, the Gasparilla Pirate Festival, Outback Steakhouse, the Busch Gardens, and more. There are three major sports teams in Tampa Bay – the Buccaneers (football), the Lightning (hockey), and the Rays (baseball). The lovely weather, nice beaches, food scene, and diverse wildlife – alligators, manatees, skunk apes, and so on – also attract several tourists and migrants every year.

    Incredible population growth rate

    The city of Tampa, Florida, is the 3rd most populous city in the state, after Miami and Jacksonville. It is also the 52nd most populous city in the United States.

    According to the US Census Bureau, the population of the Tampa metropolitan area – which includes Tampa, Clearwater, and St. Petersburg – increased by more than 20% during the last decade. As a whole, Tampa Bay is growing faster than South Florida and there are no signs that this trend will slow down.

    Statistics from the Census Bureau show that Tampa (including Hillsborough County) has grown by more than 230,000 people in the last ten years. In comparison to other metropolitan areas such as Miami and Palm Beach, the Tampa Bay metro area has seen a higher rate of population growth.

    Attractive renter's market

    The low amount of available inventory in the Tampa real estate market makes it a suitable renter’s market. According to RentCafe, 51% of the households in Tampa, Florida are renter-occupied. According to Zumper, the average rent for a 1-bedroom apartment in Tampa, FL is $1,800, up 18% from last year.

    Tampa’s Sun Bay South, Downtown Tampa, and Harbor Island neighborhoods are among the most popular for renters.

    Thriving economy and a high job growth rate

    The Tampa Bay area has a well-diverse economic base, with numerous industries, such as tourism, finance, healthcare, technology, and construction all making tremendous contributions to employment rates and economic growth. According to the Federal Reserve Bank of St. Louis, the Tampa metro area has a combined GDP of almost $170 billion, up about $46% from ten years ago.

    In July 2022, the Tampa-St. Petersburg-Clearwater metropolitan area saw the second-highest percentage increase in the number of available private-sector jobs, adding 65,500 new jobs (a 5.2 percent increase from January.

    The Port of Tampa Bay is also the largest in Florida, providing about 85,000 jobs in total. Eight Fortune 1000 companies have their corporate headquarters in Tampa Bay, including 20 companies with combined annual revenues of more than $1 billion. Job prospects in Tampa will continue to improve as the business services, tourism, and healthcare industries expand.

    You may also like: Palm Bay Real Estate Market Guide for 2022 and 2023

    Tampa Real Estate Market Forecast for the End of 2022 and 2023

    Here is the Tampa real estate market forecast for 2022 and 2023:

    An increase in home inventory will force a price adjustment

    According to Tampa Realtors, Tampa Bay currently has 1.4 months’ supply of inventory, a decrease of almost 7% YOY. A balanced market (favoring neither buyers nor sellers) has 5.5 months’ supply of inventory. Anything less is considered a seller’s market. The few homes available for sale are responsible for the rising prices of properties in Tampa.

    Higher interest rates and decreased mortgage demand will lead to a slowdown in housing demand. With an increase in inventory expected next year, Tampa may be moving towards a balanced market in the foreseeable future. Rents will increase as renting becomes more favorable than buying.

    Rents will increase as renting becomes more favorable than buying

    Rising home prices will result in a situation where renting becomes more affordable than buying a home. Rental rates have been moving up for years and will continue to increase due to demand. Already, increasing rental rates are pushing homeowners to rent out their homes to take advantage of the price hikes.

    According to Mashvisor, a traditional, long-term rental in Tampa brings in about $2,462 in rental income, with a cash-on-cash return of 2.45% and a cap rate of 2.52%.

    Decline in mortgage applications due to high-interest rates

    According to Redfin’s June market update, mortgage applications dropped 24% nationally and 6.5% of sellers decreased their asking price every week. With rising interest rates, mortgage demand is expected to drop further. Inflation and market instability are expected to be major drivers behind this decline.

    Tampa real estate market will remain a competitive

    The low inventory supply coupled with increased investor interest in the Tampa housing market means that the real estate market will remain competitive for a long time. This is because of high home prices and high demand for rental property.

    Prices might eventually shift to favor buyers more, but sellers will likely retain their edge in this housing market for a long time.

    Will the Tampa Housing Market Crash in 2023?

    No. The Tampa housing market has shown no telltale signs of an imminent market crash. A cooldown in the housing market is expected in the coming months, but Florida prices are unlikely to fall as much as the rest of the country due to demand from out-of-state buyers.

    How to Buy Investment Property in Tampa Today

    Tampa Bay has been a real estate hot spot for years. Prices have been steadily increasing, and that is expected to continue for the next few years. Here are the steps you need to take if you want to buy investment property in Tampa today:

    Organize your financing and be ready to move fast

    It is important to have a working budget before you move ahead with purchasing any rental property. The financing options you have will depend on the type of property you are looking to purchase. Traditional lenders may be reluctant to finance a pre-foreclosed home. You should also consider down payments, closing costs, attorney fees, title insurance, lien charges, and other fees. A mortgage pre-approval can come in handy when you need to move fast.

    Set a goal

    Setting a goal starts with knowing what you want. Having a clear vision of what you want and what you are willing to give to get it makes the process much less stressful. Your goals should cover the short-term as well as the long-term. They should be specific, measurable, achievable, relevant, and time-bound. Your investment goals will affect your risk appetite and will determine whether you are willing to run at a loss in the short term.

    Search for the right property type

    Make sure that you select the right property type for your investment goals. If you are looking to profit from rental income, a multifamily rental may be better suited for your goals, while single-family rentals offer better appreciation rates if you’re looking to capitalize on that.

    After deciding on the type of property you want, you should also consider the property’s location, its age, and its future potential value.

    Run the numbers

    You should then crunch the numbers to analyze the investment and determine whether you are getting a good deal. Compute all the expenses associated with the property, both initial and running expenses. Then, determine whether you can still end up turning a profit at the end of the day.

    Also, look at comparable properties in the neighborhood and find out how much they cost. It is important to pay attention to every single detail, no matter how trivial it seems, when analyzing an investment property. It might be the only difference between running at a loss and making a profit.

    Make an offer

    Once you’ve found a home that meets your needs and your budget, it’s time to make an offer. Once you have all of the necessary information at hand, come up with an offer amount based on what similar homes are selling for. Keep in mind any repairs or upgrades that will need to be done.

    If there aren’t any competing offers on the table, chances are high that yours will get accepted. But, if there is already one out there from someone else, then you might have a bidding war on your hands.

    Get a home inspection

    Once your offer is accepted, it’s time to get a home inspection completed. Narrow down any major maintenance or repairs that need to be done before you move forward with the purchase. The inspection will also give you an idea of what kind of monthly investment in repairs and maintenance might be required for this property.

    Tampa’s real estate market is expected to remain strong in 2022 and 2023. Inventory, home values, and demand for housing are expected to rise in the coming months.


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