Tampa is known for its hot summers–and even hotter real estate market. However, Tampa’s real estate market has been cooling in recent years, leaving some to wonder if and when it will heat up again.
In this Tampa housing market forecast, we break down the state of Tampa’s real estate market as we enter the last days of summer and where it’s headed as we enter the second half of 2024.
Key Takeaways
- After cooling in 2023, the Tampa real estate market showed signs of recovery in 2024, with a significant increase in median sale prices and a rise in new home construction.
- The Tampa housing market has benefited from increased inventory, driven by new construction, positioning Tampa as a top city for new housing development in the U.S.
- Tampa’s local economy remains robust. A growing population, low unemployment, higher median household income, and a lower cost of living all contribute to a healthier housing market.
- Recent reductions in mortgage rates are expected to draw more buyers into the market, further stimulating Tampa’s real estate sector as we head into the latter half of 2024.
Tampa Real Estate Market Performance in 2023
To accurately predict where the Tampa real estate market is going, it’s important to look at past performance, specifically within the last year. In this section, we’ll examine some key performance factors that contributed to Tampa’s real estate market in 2023.
Median sale price stabilized
In 2023, the median sales price for Tampa homes ended its meteoric rise, which started during the pandemic, by increasing only 0.9% from 2022 to $379,990. For reference, the median sales price increased 19.6% from 2021 to 2022. This stabilization indicates a cooling housing market, making it easier for homebuyers to enter the market.
Number of homes sold increased slightly
The number of homes sold in Tampa increased slightly year-over-year from 1,982 in 2022 to 2,131 in 2023 (a 7.5% increase). This increase is due in part to a rise in new home construction.
Days on the market increased
In 2023, homes also stayed on the market for longer, rising from a median of 16 days in 2022 to 23 days in 2023. This increase, due mainly to a lack of inventory and high mortgage rates, indicated that the housing market was returning to pre-pandemic levels.
Major Developments and Trends Observed in 2024
After a slower 2023, the first half of 2024 indicates that the Tampa housing market is warming up due primarily to an increase in inventory and median sale price.
Median sale price increased
While the median sale price only increased less than a percentage point from 2022 to 2023, by June 2024, it had increased 11.7% year-over-year to $497,000. This may be partly due to the increase in new construction.
While this higher median sale price is good for sellers, it may price out more potential buyers. However, lower mortgage rates will undoubtedly encourage homebuyers who have been waiting on the sidelines to enter the market.
New construction adds more inventory
Another indicator that bodes well for the Tampa housing market is the increasing number of homes on the market. From June 2024 to July 2024, the number of homes for sale increased 1.2% from 4,045 to 4,094. This increase can be partly attributed to new home construction, as Tampa holds the seventh spot for top U.S. cities for new home construction.
Economic Factors Influencing the 2024 Tampa Housing Market
The health of local and national economies significantly impacts real estate markets. In this section, we look at how key economic factors have influenced Tampa’s housing market and what to expect going forward.
National housing market trends overview
For years, the national housing market has suffered from a significant lack of inventory, pushing millions of Americans out of the real estate market due to high home prices. In fact, the United States is short an estimated 4.5 million homes. New construction has helped alleviate the shortage, but not at the rate or price point needed to counteract the lack of supply.
Low mortgage rates in 2020 allowed new homeowners to enter the market despite higher home prices. However, mortgage rates increased from an average of 3.38% in 2020 to peak at just under 8% by the fall of 2023. Fortunately, interest rates seem to be lowering at the end of summer 2024.
Local Tampa economic indicators
Tampa’s local economy has rebounded significantly since the pandemic and continues to grow. The following are some economic factors that bode well for a healthy housing market.
- Tampa’s population has been steadily growing, with the most recent growth rate of 1.07% from 2023 to 2024.
- Tampa’s unemployment rate (3.1%) is below the national unemployment rate (4.3%).
- Tampa’s median household income ($67,000) is also higher than the national median ($59,228).
- Tampa’s cost of living is 4% lower than the national cost of living, making it easier to afford housing.
A growing population, lower unemployment, higher household income, and a lower cost of living help set the stage for a housing market comeback in the coming months.
Interest rate and mortgage rate trends
Interest rates and mortgage rates are the two biggest factors that will affect the Tampa housing market in the latter half of 2024, which, according to recent trends, bode well for Tampa’s housing market.
The Federal Reserve cut interest rates to a 15-month low in the second week of August 2024. Reduced mortgage rates are expected to drive more buyers into the Tampa market.
Overall, Tampa’s real estate market is on the rise, making it the perfect time to become a licensed Florida real estate agent if you aren’t already. Fortunately,
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Sources:
- “2024 Tampa Real Estate Market Trends and Analysis.” RealWealth, July 19, 2024. https://realwealth.com/real-estate-markets/tampa-florida/.
- “All-Transactions House Price Index for Tampa-St. Petersburg-Clearwater, FL (MSA).” FRED, May 28, 2024. https://fred.stlouisfed.org/series/ATNHPIUS45300Q.
- Dehan, Andrew. “Mortgage Rate History: 1970s to 2024.” Bankrate, August 8, 2024. https://www.bankrate.com/mortgages/historical-mortgage-rates/#rates-over-time.
- DePietro, Andrew. “Will the Tampa Housing Market Crash?” Forbes, June 3, 2024. https://www.forbes.com/sites/andrewdepietro/2023/10/18/will-the-tampa-housing-market-crash/.
- Marek, Emily. “Six of the Top 20 Cities for New-Home Construction Are in Florida.” South Florida Agent Magazine, October 6, 2023. https://southfloridaagentmagazine.com/2023/10/06/movebuddha-new-home-construction-florida/.
- Redfin. “Tampa Housing Market: House Prices & Trends.” Redfin. Accessed August 12, 2024. https://www.redfin.com/city/18142/FL/Tampa/housing-market.