Tampa, Florida, is one of the fastest growing cities in the US and boasts a strong housing market that has been bracing for reform pressures through this point. With a diverse economy, large tourism sector and growing population, investing in the Tampa Bay area has never been easier for anyone looking for long-term growth.
Population and Labor Market
The Tampa Bay metropolitan area, located in the southwest part of central Florida along the “I-4 corridor”, includes three cities: Tampa, Clearwater, and St. Petersburg. As of 2021, the total population is expected to exceed 3.2 million, making it the 18th largest metro in the country.
Below, you’ll see that Tampa has grown steadily over the past decade, except for a slight decline in 2020. This growth trend is expected to continue as more and more people move into this area.
Tampa is home to many major employers in a number of industries, including health care, finance, cyber security, and tourism. The unemployment rate is currently pegged at 2.6%, which is almost a full percentage point below the national average.
Tampa’s median age of 35.9 years is within the peak age range for home construction and will help drive housing demand in the near future.
House prices
Home prices in Tampa have remained stable during the housing recovery. As you can see in the graph below, year-over-year growth is declining rapidly, but home prices remain at their peak near the $350k-$375k mark. The lines on this graph are not very different from what we are seeing from other strong markets like the US Dallas and Fort Worth,
While these prices may decline in the near future due to a decline in overall growth, I do not expect this to be the long-term trend. I would also like to point out that as of April 2023, prices in Tampa are approximately $60,000-$80,000 below the national average. Overall, investing in Tampa remains attractive.
rent growth and cash flow
Rental growth, like sale prices, has moderated over the past year, but has increased significantly since 2018. Once again, I don’t expect rent prices to start falling much. It is possible that they may drop by a few hundred dollars, but it will not stay that way.
For cash flow, the map below showing the rent-to-price (RTP) ratio in each zip code indicates that cash flow depends on location, but some areas may produce good figures. Generally, you want an RTP ratio closer to 1% when looking for cash flow. Parts of East Tampa and North St. Petersburg, as well as most of Clearwater, are your best options. You can also find some cash flow in suburbs north of Tampa, such as Wesley Chapel, which has grown significantly over the past two decades.
Inventory and Market Health
Inventory in the Tampa market is down 22% year-over-year, which has helped keep prices stable. The supply shortfall is in line with the levels we saw in 2019, so it’s fair to say that market conditions are returning to some degree of normalcy. This is not a bad thing. If anything, the lack of volatility makes the market a bit more predictable, unlike some of the pandemic bullish markets that are now crumbling.
Furthermore, Days on Market (DOM) has been climbing since May 2022 and is also in line with pre-pandemic numbers.
winning strategies
Overall, Tampa is a strong market for real estate investors. It’s priced well, has some decent cash flow potential, and a strong economy to support future growth. While the national housing market is experiencing a recovery, Tampa has fared well. Prices have remained relatively stable, and leading leading indicators suggest that the market will be one of the more stable housing markets in the country in the coming months.
“I recommend using a long-term rental strategy to invest in Tampa,” says Kim Meredith-Hampton, an investor-friendly real estate agent in the Tampa area. are also considered (in such a situation you can use long term strategy as a possible emergency exit).
If you’re interested in learning more about investing in Tampa, partner with a local investor-friendly real estate agent like Kim, who can guide you through strategies, tactics, and neighborhoods to focus on.
Here’s how to contact Kim Meredith-Hampton on Agent Finder:
- Search “Tampa, FL”
- Enter your investment criteria
- Select Kim Meredith-Hampton or other agents you would like to contact
Kim is an investor herself, managing a 3,000-unit portfolio in Central Florida and Jacksonville with extensive experience in both single and multi-family investments. He holds several designations in the real estate field, including MPM® Master Property Manager NARPM and RMP® Residential Management Professional, and is currently employed with Florida Associate. Board of Directors of Realtors and the NAR Task Force ORRA.
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Use the Agent Finder to connect with local market experts like Victor Stephan, Kim Meredith-Hampton and Matthew Nicklin.
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Note by BiggerPockets: These are the views expressed by the author and do not necessarily represent the views of BigPockets.
