Housing Market Trends in 2023
The past year posed significant challenges for housing markets across the nation. As mortgage rates rose and demand waned, prices experienced a modest dip in many regions. However, Tampa, Florida, demonstrated resilience in the face of these challenges, largely holding steady thanks to a robust job market, limited inventory, and a steadily growing population.
Looking Ahead to 2023
As we look ahead to 2023, it appears that Tampa’s real estate market is poised for another robust year, especially for move-in-ready properties in the Tampa-St. Petersburg-Clearwater metropolitan statistical area. Graystone Investment Group, a prominent figure in the local real estate scene, closely monitors these developments.
Kseniya Korneva, a real estate agent with Pineywoods Realty in Tampa, observes, “I’m actually starting to see multiple offers again. It’s almost as if we have two housing markets right now. Competitively priced homes in excellent condition, located in desirable neighborhoods, are likely to receive multiple offers. Meanwhile, homes needing updates or situated in less popular neighborhoods may linger on the market for 30, 60, or even 90 days.”
Tampa’s Real Estate Construction Activity
In the single-family sector, construction activity exhibited volatility in 2022. It peaked in May with 1,635 permits but hit a low in December with only 901 permits. Although activity has rebounded recently, it remains significantly lower than a year ago.
Over the last three months, Tampa issued 2,844 permits for single-family housing, marking a 31% decrease compared to the same period a year ago when 3,997 permits were issued.
Multifamily Permits on the Rise
Permits in the multifamily sector followed a different trajectory, skyrocketing from just over 330 in January to more than 1,489 by November. While permits slightly declined from that peak, significantly more multifamily permits are being approved compared to a year ago.
In the last three months, Tampa witnessed 4,096 approvals for multifamily housing permits, compared to a mere 989 the previous year, marking a remarkable 316% increase in a single year.
Tampa Housing Supply and Demand
Tampa’s supply of for-sale listings currently stands at 2.6 months. While this represents an increase of 1.8 months compared to the previous year, it remains well below the levels of a balanced market, typically considered at 6.7 months of supply. Tampa’s inventory is also slightly below the national average of 2.8 months.
Korneva explains, “Higher rates and concerns about the national economy have discouraged some homeowners from listing their properties. The current economic volatility has left many hesitant to make significant life changes right now.”
Rental Market and Consumer Sentiment
Rental vacancies experienced a slight decrease compared to the previous year. Tampa’s 7.7% vacancy rate is notably higher than the national average of 6.0%, likely due to the significant increase in multifamily permits issued last year, which expanded rental supply.
With low inventory and elevated mortgage rates, it’s no surprise that consumer sentiment stands at 66.9. Although it has improved slightly since its lowest point last summer, consumers remain cautious. Mortgage loan applications are down 6.1% compared to the previous year.
Despite this, Korneva notes that bidding wars are making a comeback, albeit with more reasonable terms. “In multiple offer situations, winning offers aren’t as unattainable as they were last year. Buyers are preserving their inspection periods, not offering appraisal gaps, and some are even receiving closing cost incentives.”
Median Home Price and Rental Rates in Tampa
Tampa’s median home price currently stands at $371,280, slightly down from its peak last summer ($401,930) but still 4.1% higher than the previous year, according to Redfin. It remains below the national median of $395,770.
Korneva predicts, “I do not expect prices to drop any time soon. Our inventory is still very low, and many who bought their homes at rates lower than 4% are now turning their homes into rentals, adding additional pressure to the housing market.”
Unemployment Trends and Builder Confidence
Tampa boasts a low unemployment rate of 2.7%, with over 82,600 new jobs added in the last year, according to the Bureau of Labor Statistics. This favorable job market has contributed to Tampa’s stable real estate environment.
Employment in Tampa’s construction sector has been on the rise, with nearly 6,160 jobs added in the last two months. The area’s low unemployment rate is expected to keep foreclosures at a minimum, with the current foreclosure rate at 0.7%, according to Black Knight.
Builder sentiment in Tampa has improved from its low point in mid-2022. The National Association of Home Builders/Wells Fargo Housing Market Index currently rates local builder sentiment at 52 out of 100. Although it has decreased from the 83 rating seen a year ago, it has increased by 21 points since December.
Tampa Real Estate Market Predictions
With low unemployment, improving builder and consumer confidence, Tampa’s real estate market is poised to remain steady in the foreseeable future. Graystone Investment Group’s forecast suggests a slight decrease in single-family building permits in Tampa over the next few months, reinforcing
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