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Tampa, Florida, is likely one of the fastest-growing cities within the U.S. and boasts a powerful housing market that’s held as much as correction pressures by way of this level. With a various economic system, giant tourism sector, and rising inhabitants, investing within the Tampa Bay space is a no brainer for anybody in search of long-term development.
Inhabitants and Labor Market
Positioned within the southwest portion of Central Florida alongside the “I-4 Hall,” the Tampa Bay metropolitan space consists of three cities: Tampa, Clearwater, and St. Petersburg. As of 2021, the entire inhabitants tracks at simply over 3.2 million, making it the 18th largest metro within the nation.
Beneath, you’ll see that Tampa has grown constantly over the past decade, aside from a minor decline in 2020. This development pattern is predicted to proceed as an increasing number of individuals transfer into the world.
Tampa is dwelling to a number of main employers throughout a spread of industries, together with healthcare, finance, cybersecurity, and tourism. The unemployment fee is at present pegged at 2.6%, which is almost a full proportion level decrease than the nationwide common.
Tampa additionally includes a median age of 35.9 years previous, which is inside the peak family formation age vary and can assist prop up housing demand for the foreseeable future.
Residence Costs
Residence costs in Tampa have remained secure in the course of the housing correction. As you may see within the graph under, YoY development is declining quickly, however dwelling costs have remained at their peaks close to the $350k-$375k mark. The traces on this graph aren’t so totally different than what we’re seeing from different robust markets within the U.S., equivalent to Dallas and Fort Value.
Whereas these costs may decline within the close to future as a result of total development declining, I wouldn’t anticipate this to be a long-term pattern. I might additionally level out that costs in Tampa are round $60,000-$80,000 lower than the nationwide common as of April 2023. Total, investing in Tampa stays engaging.
Lease Development and Money Move
Lease development, like gross sales costs, has flattened out over the previous 12 months however is up considerably since 2018. As soon as once more, I wouldn’t anticipate lease costs to start out falling off a cliff. It’s potential that they may decline by a pair hundred {dollars}, however it gained’t keep that means.
As for money movement, the map under exhibiting the rent-to-price (RTP) ratio in every ZIP Code signifies that money movement is dependent upon location, however some areas can ship good numbers. Usually, you wish to discover an RTP ratio near 1% when in search of money movement. Elements of East Tampa and North St. Petersburg are your finest bets, in addition to most of Clearwater. You may also discover some money movement within the suburbs north of Tampa, equivalent to Wesley Chapel, which has grown considerably over the past twenty years.
Stock and Market Well being
Stock within the Tampa market is down 22% YoY, which has helped in holding costs secure. The dearth of provide is extra in keeping with the degrees we noticed in 2019, so it’s truthful to say that market situations have/are returning to regular in some style. This isn’t a nasty factor. If something, the shortage of volatility makes the market a bit extra predictable, opposite to among the growth markets of the pandemic that at the moment are busting.
Moreover, days on market (DOM) has been on the climb since Could 2022 and can also be again in keeping with pre-pandemic numbers.
Profitable Methods
Total, Tampa is a strong marketplace for actual property traders. It has an excellent worth level, some respectable money movement potential, and a powerful economic system to assist future development. Whereas the nationwide housing market experiences a correction, Tampa has held up properly. Costs have been comparatively flat, and key lead indicators recommend that the market can be one of many extra secure housing markets within the nation over the approaching months.
Kim Meredith-Hampton, an investor-friendly actual property agent within the Tampa space, says, “I like to recommend utilizing a long-term rental technique to put money into Tampa, with quick and mid-term leases additionally being thought of when the numbers crunch out (wherein case you need to use the long-term technique as a possible emergency exit).”
For those who’re considering studying extra about investing in Tampa, accomplice with an area investor-friendly actual property agent like Kim, who can information you thru the methods, ways, and neighborhoods to deal with.
Right here’s how you can contact Kim Meredith-Hampton on Agent Finder:
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Kim is an investor herself, managing a 3,000-unit portfolio throughout Central Florida and Jacksonville with intensive expertise in each single and multi-family investing. She holds a number of designations inside the true property sector, together with MPM® Grasp Property Supervisor NARPM and RMP® Residential Administration Skilled, and at present serves on the Florida Assoc. of Realtors Board of Administrators and the NAR Job Pressure ORRA.
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Observe By BiggerPockets: These are opinions written by the writer and don’t essentially symbolize the opinions of BiggerPockets.