A recent Zillow forecast for the Tampa metro area real estate market predicted that the median home value would continue to rise through this year and into 2024. In fact, they anticipated even bigger price gains for the Tampa-St. Petersburg-Clearwater metropolitan area compared to other U.S. cities. While many cities are currently experiencing a slowdown or decline in home prices, Tampa's housing market is poised for growth.
Tampa Real Estate Market Forecast Into 2024
Despite the challenges faced by housing markets nationwide, the Tampa-area real estate scene has remained resilient. Strong job market, low inventory levels, and a growing population have contributed to the sustainability of house values. Looking ahead, it is anticipated that home prices in the area will continue to rise at a steady pace in the coming years.
However, there have been some changes in the Tampa real estate market over the past couple of years. Home prices and mortgage rates are significantly higher today than they were a year ago, making it difficult for many potential homebuyers, especially those with lower incomes, to enter the market. Despite this, the Tampa-area housing market is expected to appreciate further, with one forecast suggesting that prices will rise more in the next 12 months than they did in the past year, according to researchers at Zillow.
According to Zillow, the median home value for the Tampa-St. Petersburg-Clearwater metro area was around $368,000 in May 2023. They predict a 6.7% increase in prices from April 2023 to April 2024. While some may consider this forecast to be optimistic given the reduced buyer demand, it is important to remember that these are educated guesses and not exact projections. The main takeaway is that home prices in the Tampa-area real estate market are expected to continue climbing through 2023 and into 2024.
Supply Levels Dropping Again in 2023
Home price and housing market forecasts for the Tampa area depend on factors such as supply and demand within the local market. The interplay between these factors can influence competition and the rate of home price appreciation. Unfortunately, in 2023, the Tampa real estate market is once again experiencing a decline in inventory levels, following a broader trend seen in cities across the country.
One of the causes for this decline is attributed to higher mortgage rates. Many homeowners currently have lower mortgage rates compared to the current market rates, making them reluctant to list their homes for sale, as purchasing a new home would mean taking on a higher rate. In March 2022, the Tampa area had only a 0.7-month supply of homes for sale, whereas a "balanced" real estate market typically has about a 5-month supply. The tight market continued through the beginning of 2023, but by January, inventory levels rose to about a 3.5-month supply, giving buyers more options and negotiating power.
However, this supply growth trend did not last long, and supply levels within the Tampa-area housing market began to drop again in the first few months of 2023. As of April, there was only about a 1.7-month supply of homes for sale, which is better than the previous year but still well below normal. A Realtor.com report from June 2023 showed that the number of new listings declined by over 25% in the past year, indicating a decrease in new properties entering the market.
Our Tampa real estate forecast for the rest of 2023 and into 2024 predicts that tighter inventory conditions will increase demand among buyers and put upward pressure on home prices, leading to steady price growth in the foreseeable future.
Tampa Housing Market Could Accelerate In 2023
Similar to most major metropolitan areas, the real estate market in Tampa has experienced a slowdown over the past year. Factors such as higher prices and mortgage rates contributed to this slowdown. However, unlike many other metros, the Tampa-area housing market appears to be accelerating into the second half of 2023.
In April of last year, homes listed for sale in the Tampa area were only on the market for a median of seven days. However, by April 2023, the median number of "days on market" had increased to around 31, indicating a slowdown. Since then, the time it takes to sell a house has been steadily decreasing, suggesting that the market is speeding up again.
Additionally, the percentage of homes that go under contract within two weeks has been rising steadily since the start of 2023. This indicates that properties are selling more quickly as of late spring 2023 compared to the beginning of the year. These statistics suggest that while the market has slowed down in recent months, it is gaining momentum again in 2023. This supports the prediction that the Tampa real estate market could become more competitive for buyers in the coming months and into 2024.
A Strong Economy and a Growing Population
The Tampa metro area boasts a strong local economy with an unemployment rate of 2.3% in April 2023, lower than the state of Florida and the national average. This thriving economy has two positive effects on the real estate market. First, it makes the area more attractive to people relocating from elsewhere, increasing the number of buyers in the market. Second, it provides local residents with the confidence and financial capacity to purchase homes, further driving demand.
Moreover, the Tampa-St. Petersburg-Clearwater metropolitan area has experienced significant population growth in recent years. According to the U.S. Census Bureau, Hillsborough County, which encompasses the city of Tampa, was the eighth fastest-growing county in the United States from 2021 to 2022, gaining nearly 29,000 new residents. These population growth trends have increased housing demand among both renters and buyers, reinforcing the expectation of continued price growth in the Tampa-area real estate market.
In conclusion, the Tampa real estate market is poised for growth, with rising home prices, tightening inventory, and an accelerating sales pace. Supported by a strong local economy and a growing population, the housing market in Tampa, Florida, is expected to continue its upward trajectory in 2023 and into 2024. However, it is essential to bear in mind that long-range predictions are educated guesses, and future economic or housing trends are subject to change.
