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The Tampa Bay Housing Market in 2023: Here’s What 4 Experts Say

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You want to sell your home in the Tampa Bay area, but you’re concerned 2024 might not be the best time to do it.

The Tampa housing market has been hot for the last few years, especially due to the COVID-19 pandemic. But now, with the uncertainty of a global recession looming, interest rates are on the rise.

The Tampa real estate market still ranks among the hottest in the country. In 2023, Florida was the second fastest-growing state in America. There are plenty of reasons to consider listing your home this year.

If you are considering listing your home, you want realistic expectations on its value, as well as a timeline of how soon it will sell. You also want to know what to expect from buyers. We want to make sure you feel confident in your decision to sell and that the experience goes smoothly.

This guide will look at Tampa Bay housing market trends for 2024. We’ll discuss how rising interest rates impact the market, affordable housing challenges, sales outlooks, and the renters market. You will better understand where the market is and what to expect if you decide to list your home.

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Will rising interest rates impact the Tampa housing market?

Let’s begin with the elephant in the room. If you’re concerned about rising interest rates impacting the sale of your home, that concern is valid. The Tampa Bay real estate market has benefited from low-interest rates in recent years, which drove sales to record highs.

At the end of 2023, the Federal Reserve raised interest rates to a range of 5.00% – 5.25%. That is the highest level since 2007. Further increases are expected.

The measures aim to discourage home buyers and cause the housing market to cool off to avoid further inflation. Despite these measures, experts say the Tampa Bay Housing Market is not expected to dip until late in the year.

In other words, it is still a seller’s market, at least for the time being. And while it may seem like doom and gloom, experts don’t expect the Tampa housing market to crash. Here are some reasons the market is stable enough for you to sell.

Owners are more secure

A recent article in Norad Real Estate Investments Marco Santarelli discussed the market’s stability.

Looking ahead, the future market outlook for Tampa remains optimistic yet cautious. While the current market conditions favor sellers, with rising prices and limited inventory, there are potential challenges on the horizon.

Factors such as economic fluctuations, interest rate changes, and unforeseen events can impact the housing market’s trajectory. However, with proper research and guidance, both buyers and sellers can navigate these uncertainties and make informed decisions.

Hot Tampa Bay real estate trends

In 2024, Tampa Bay ranked in the country’s top 9 places to live. The area is experiencing more people relocating to the area than it has in decades. As a result, the Tampa Bay housing market continues to experience high demand.

The area remains one of the more affordable places to live. There is also a booming job market, and the average salary ranks higher than the national average.

There are a lot of reasons to buy Tampa Bay properties. It doesn’t matter how expensive your home seems, someone is bound to buy it to find a home in the area.

Advantages of the seller

Although the market is cooling down, there is still a lot of demand. Buyers are gaining more control than they had throughout the pandemic when the market was booming, but there is still a lot of benefit to being a seller.

By December 2023, fixed mortgage rates increased to 6.35%. The increased rates discourage first-time home buyers from buying right now. Anyone making under $85,000 may struggle to enter the market right now.

But rising interest rates are not discouraging those relocating to the area. Despite climbing rates, sellers have yet to adjust their prices. And while 2024 may see home prices plateau, they are less likely to dip for the time being.

The challenges of affordable housing

An article published by The Business Observer by Louis Llovio talked about the challenges of affordable housing in Tampa.

High demand for housing in the Tampa Bay area is also impacting affordable housing. Tampa Bay housing trends have indicated an increased need for affordable housing with a decreased supply. The lack of affordable housing and increases in rent are resulting in increased housing instability.

In 2020, it was widely reported that 2.1 million Floridians were spending more than 30 percent of their income on housing. With the addition of inflation and the rising cost of living, many in Tampa are searching for affordable housing options.

Fewer vacancies

The increased demand has resulted in fewer vacancies. The problem is likely to get worse in the coming years.

Many affordable housing rental units are at risk of disappearing from the market completely over the next 20 years. It’s expected to happen as building agreements for subsidized units expire.

Systemic barriers

Racial injustices play a role in housing inequity as well. According to Florida Realtors Only 44.1% of Blacks owned homes compared to majorities of Asian-Americans (63.3%), and Latinos (51.1%).

In recent years, lower interest rates made it easier for first-time buyers and those facing systemic barriers to purchase a home. But as interest rates continue to rise, it is becoming increasingly difficult once again.

Climate change

The changing climate is another concern of those advocating for more affordable housing options.

Many say that more action needs to be taken to keep affordable housing in the Tampa Bay area safe from natural disasters as the risk of climate change increases.

Support has been provided to owners and managers of affordable housing buildings to better prepare for the possibility of hurricanes and heat. The hope is that these changes will help prevent residents from being displaced in the case of an emergency.

Taking action

Lawmakers in Florida are trying to confront these challenges by implementing changes to the market.

The Tampa Real estate market’s expected to see the addition of 10,000 affordable homes by 2027, and more than half of that goal has been met. The hope is that the additional homes will lead to more vacancies to help close the housing gap.

The hope is that the additional inventory of homes will help level out the Tampa Bay housing market. But critics say the number will not be enough to meet the demands. The Tampa Bay area is on the verge of a housing crisis.

All of this is to say that if you’re considering selling your home, this is the time. The market is unlikely to stay as strong as it has been in recent years.

Tampa Bay housing market sales begin to dip

Even though the Tampa housing market remains strong, there was a dip in sales recorded in 2022. It is a sign that the tide is changing. But, it is important to note that the drop’s size depended on the cost of the home in question.

Luxury homes were among the hardest hit. Sales of elegant homes dipped as far as 44 percent. While that may make sellers weary, it may not be as bad as it sounds.

Luxury homes inflated

Tampa Bay real estate trends saw luxury homes jump during the pandemic. Affluent buyers were relocating to the Tampa housing market to take advantage of the warm weather, beautiful beaches, and affordable living.

The increased popularity of Tampa Bay luxury homes drove the market higher than expected. As a result, those sales have a long way to fall. So seeing a sharp decline in sales as the market cools off is not surprising.

The stock market

Luxury home sales are also declining because of uncertainty in the stock market. Talk of a global recession has caused everyone to be a bit more cautious. Wealthy buyers often have much of their money tied up in unpredictable stocks.

As a result, buyers are less likely to make large investments or take risks at this time, which is why luxury homes are among the hardest sales hit.

Other Tampa Bay housing trends

In an article published by Steadily author Zoe Harper discussed the housing supply and demand in Tampa.

Current Listings

As of early 2024, Tampa’s active listings are substantial, with a reported 16,020 homes available for sale. This inventory level reflects the ongoing demand in this thriving market, where buyers continue to show strong interest.

Housing Supply Trends

The Tampa area has seen a notable trajectory in its housing supply. While inventory levels in many parts of the country have witnessed fluctuations, Tampa’s real estate market maintains a growth trend. Currently, the median home price stands at $382,663 adjusted for a modest annual increase.

New Construction

In response to consistent demand, new construction is a key component of Tampa’s housing supply. A new study finds that nationally and in Florida, permits for new homes fell for the second straight year, making it more difficult for buyers in an already-crowded market.

Will rent and housing prices slow down?

Miguel Octavio shared housing projections in a recent article published by WTSP.

High rent costs

According the Business Observer rent is up in the Tampa-St. Petersburg metropolitan area by 12.2% from 2023, but the jump remains beneath the national median increase of 12.6%, according to a Friday report by Construction Coverage.

With vacancies for affordable homes at an all-time low, the demand for affordable housing is huge. And that demand is expected to get worse as home ownership becomes less and less feasible.

Those looking for places to rent are finding that places are over capacity or out of their price range. And the cost of rent is expected to continue to increase, even if it’s not as dramatic.

Investing in Tampa Bay properties

The Tampa Bay housing market continues to remain hot as more people choose to relocate to the area every day.

Many investors view this as an opportunity. If you consider selling your home, the demand for affordable housing might benefit you.

Investors buy homes in the Tampa Bay area to flip or convert into rental properties. Airbnb-style properties are also expected to remain strong in the Tampa Bay area due to its booming tourism market. Investors are often interested in properties for that purpose as well.

Key Takeaways

If you’re considering listing your home, you may want to know what the Tampa housing market will be like in 2024.

Although the Tampa real estate market is slowing down, it remains hot. Sellers will continue to have much control this year, and market value continues to be much higher than it was a few years ago.

If you’re curious about the value of your home, submit your home address to our website today. We’ll provide a home valuation to help you sell your home quickly and conveniently!

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