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Is Now a Good Time to Buy a House in Tampa? All Your Questions Answered

Is Now a Good Time to Buy a House in Tampa? All Your Questions Answered

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Whatever the reason you’re looking at a house in the Tampa Bay area of Florida, you’ll want to know all of the ins and outs of the Tampa real estate market in 2022.

For the past couple of years, the real estate market all over the United States has been exploding. In general, this has to do with a low inventory of homes available versus the number of people who want to buy homes.

The Tampa real estate market is great for sellers, but for buyers it’s a huge challenge. The question of whether this is a good time to buy in Tampa Bay has everything to do with your circumstances and resources, but understanding what’s behind the current housing market will help you to make the best decision for your family and your budget.

Is now the time for you to buy a home in Tampa, Florida? Let’s get to the bottom of that question.

Why the Tampa housing market is so hot

The booming Tampa housing market is showing little signs of slowing down. In fact, Tampa Bay was listed as the most expensive in the country in 2022 according to a report in the Tampa Bay Times that was based on numbers from Zillow.

Those numbers are pretty astonishing. According to this housing report, drivers for the rise in home prices include the increase in the number of home buyers in the area, a growing job market, and a large need for housing in general, both in terms of purchase and rentals.

All of this comes together to mean that housing is hard to come by in the area. The low inventory of available homes makes it almost impossible for homeowners to find a home to purchase. This hot housing market has caused home prices to go higher in Tampa, and there’s no sign that the real estate industry is slowing down at all.

In fact, according to that Tampa Bay Times report, 2022 will see home prices in Tampa go up 25%, that’s compared to just 14% in the rest of the country.

Who’s buying houses in Tampa?

House interior in Tampa, FL

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Part of what’s happening in the housing market in Tampa is a flood of real estate investors.

In the last year, one in four homes in Tampa, FL was sold to an investor. In many cases, these investors are then turning these pieces of real estate over to convert them into rental property. Home sales to individual families are near an all time low.

These investors are often bringing cash offers to the table, something traditional buyers can’t do. Investment property is a huge factor in home values in housing markets around the downtown Tampa area and all over the county.

Economic growth in South Florida is pushing many buyers towards Tampa as well. People are leaving the astronomical home prices and economic realities in Miami. There are other factors pushing people north from South Florida as well, including the hot market realities in Miami, Florida and the increasing risk of flooding and hurricanes that have plagued the lower peninsula of Florida in the last decade.

What’s driving the buyer’s market conditions?

This is driven by the historically low interest rates that have changed the shape of the rental market and Tampa’s housing market. The Tampa metro area is far from the most affordable cities in the United States.

These factors make Pinellas County a hot housing market with rising home prices. Tens of thousands of families are looking for homes in the area and are not able to find them in this seller’s market.

The housing prices in Tampa are also going higher because the job market is growing faster than the amount of available housing. Though home values are going up fast as well, this doesn’t help homeowners who are looking for a good value with a local realtor.

It’s a great time to buy in Tampa if you can

Tall buildings for sale near Tampa, FL

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Though all of these factors are making it so that cheaper homes are not available, buying a dream home in Tampa Heights or other areas around the city is still a good investment. It’s all about figuring out how to enter the market and make the most of the rising property values.

To get to those real estate and home sales goals, home buyers have to find out what steps they need to take in order to find the right home for them in the Tampa metro area.

Curious about how to get there? Here’s all of the insider information to make it work when you’re trying to buy a home in Tampa.

1 – Figuring out what budget you need to buy a Tampa Bay home

With home values constantly going up in Hillsborough County and Pinellas County, real estate budgeting is no easy thing. Interest rates are fluctuating right now too, which is affecting both home sales and rental property.

The best way to figure out what you can afford is to use the 28/36 rule that is the gold standard in financial lending. Home costs, whether for rental property or a mortgage, should not be more than 28% of your monthly income. All in, your debt payments should not be more than 36% of your monthly income.

When working with a mortgage lender or a bank for a home loan, keep these real estate numbers in mind. How much house you can afford in Tampa will help make your house hunt so much easier.

To make the calculation of how much you’re likely to be able to get a loan for, multiply your monthly income by .28 – this will give you exactly how much house you can afford.

2 – Consider all of the costs in a home payment in Tampa Bay

Home interior in Tampa, FL

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Don’t forget to add all of the things that are included in a home payment in your calculations. this means homeowner’s insurance, interest, property taxes, required HOA fees, and principal payments.

One of the most striking things about Tampa is just how high those HOA fees are. Compared to the rest of the country, Tampa has huge costs from homeowner’s associations! In fact, Tampa HOA fees tend to run up to almost half of the total cost of the mortgage total! This is much higher than real estate in other places, even in Florida.

Most of these fees are on older homes, which tend to have much higher HOA fees than newer builds. Tampa in particular has a large number of older houses compared to real estate in other parts of Florida.

It’s not just HOA fees that are higher in Tampa than they are elsewhere. Hurricane season lasts for half of the year in Tampa, and the proximity to the Gulf of Mexico and the beaches means that flooding during that long hurricane season is more likely.

Not only that, but the older homes in Tampa also carry higher insurance rates. Overall, Tampa homeowners pay almost twice the national average in homeowner’s insurance premiums.

If you’re buying a house in Tampa, you may want to consider buying flood insurance for those long hurricane seasons. This will likely raise the yearly homeowner’s insurance premium by around a third, but it’s money well spent in the case that a hurricane does hit the area.

3 – Know what home prices to expect when buying a house in Tampa

If you’re buying a house in the Tampa Bay real estate arena, you’ll want to know how much you can expect to pay for real estate. This will let you gauge what property you can afford before you start talking to real estate agents.

In 2022, the median price for residential real estate for sale in Tampa is $348,000. This is up fifteen percent over 2021, though it’s still only a thousand dollars higher than the median home price across the United States. That’s a good number to know, because it means that even though Tampa real estate is going up a lot, if you’re selling your home in another part of the country to move to Tampa, you’ll likely be able to finance the real estate deal from your previous home sale.

Though the average listing in Tampa, FL is $348,000, the average sale price of a home in Tampa is actually $415,500. That’s a huge jump! This is because home sellers in Tampa are receiving so many offers for houses that the final sales price is driven up much higher than the listing price.

This is a critical piece of information for people who want to buy a house in Tampa. If you go in and make an offer that’s at the top end of the mortgage that you qualify for, you’re likely to get out bid on that piece of property on Tampa St. or in Sun Bay South.

To be successful in buying real estate in Tampa, take the approach of making a first offer that is well below the amount that you have on your mortgage loan. You need to be able to leverage up from the original sale offer that you make.

Average sales price is an important number for any potential home buyer to know when trying to buy a house anywhere, but in this market it’s even more important.

The median home prices in other major Florida markets are as follows. Seeing these numbers can help you better understand how the median sales price in Tampa compares.

  • Lutz – $445,000
  • Land O’Lakes – $407,000
  • Dunedin – $387,000
  • Hillsborough County – $350,000
  • Pinellas County – $350,000
  • St. Petersburg – $335,000
  • Clearwater – $325,000

Note that all of these are less than what the average home in Tampa is going for, with the exception of Lutz. If you are looking for a home in the Tampa metro area but don’t need to be right in the city on Tampa St., you might consider looking at one of these outlying areas.

4 – Get pre-approved if you can

Home interior in Tampa, FL

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In the market that’s this tight, there are only two ways that you’ll be competitive as a buyer.

  1. Get pre-approved for a home loan
  2. Pay cash for a home sale

There are so many qualified buyers who are ready to pay over market value for homes in Tampa right now that no one is going to be competitive on a home deal without having either a preapproval or cash on hand. There’s just no way to do this otherwise.

First time homebuyers in Tampa Bay should have good credit or a larger down payment if they want to prequalify for a traditional home loan. There are lots of great programs for first time homebuyers that will support you if you don’t have these two qualifications.

The City of Tampa in particular offers a robust range of first time homebuyer programs, but it also offers a lot of programs for people who have already owned a home. Here are five that are well established and are great resources for anyone looking for a home in Hillsborough County or Pinellas County.

  1. Mortgage Credit Certificate or MCC
    This housing assistance program will give new homeowners in Tampa a fifty percent tax credit on mortgage interest annually. It’s done through the Housing Finance Authority of Hillsborough Co., and it’s well worth investigating for both new homeowners and if you’ve owned a home before in Florida or elsewhere.
  2. Home Sweet Home Hillsborough Program
    This is for second mortgages, and it’s a fantastic program in Tampa. This second mortgage program gives homeowners up to ten thousand dollars that will either go to the down payment on the home or the closing costs. That’s a huge chunk of the sales process, and for potential Tampa homeowners it can tip the scale in this tight housing market.
  3. East Tampa CRA Down Payment Assistance
    This program is for renters in the Tampa area, helping them to transition from renting a home to owning one. Any renter who is trying to buy a home in East Tampa can apply to get up to fifty thousand dollars in support for their home purchase.
  4. Dare to Own the Dream (DARE)
    A program from the City of Tampa, DARE is a way for potential homeowners in the city to get support beyond the typical value of a first time home loan. DARE offers down payment support of up to forty thousand dollars in the form of a second mortgage. Here’s the amazing part – this money comes with $0 in monthly payments and 0% interest.
  5. City of Tampa Mortgage Assistance Program
    For homes that are within the city limits of Tampa, the Mortgage Assistance Program can help out with a loan for a downpayment of up to $15,000. That’s a huge number given the tightness of the housing market in Downtown Tampa.

These programs that help homeowners get into the house that will work for them in Tampa are an added benefit that makes buying in Tampa Bay much more reasonable for many potential homeowners.

5 – Finding a great neighborhood in Tampa Bay, FL

Kitchen in a Tampa, FL home

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Though price reductions are unlikely in the Tampa housing market, there are lots of ways for you to make the most of your home search in Tampa. One of the best ways is to learn about the neighborhoods around the metro area and find the place that fits you best.

Finding an area of the city that works for you and your budget might take some leg work or working with a local agent, but it’s a key component to getting a house in Tampa. Here are some top neighborhoods for Tampa homebuyers to look at.

  • Downtown Tampa
    The beautiful Tampa skyline isn’t visible from the condos downtown, but it’s incredibly convenient to live in the not-too-busy but still bustling downtown section of the city.
  • West Meadows
    Located in Northeast Tampa, this is a master planned community with integrated services. It’s a highly sought after area of Tampa for good reason.
  • Tampa Palms
    In New Tampa, this is a higher end neighborhood with highly ranked schools and lot sof local shopping
  • Davis Islands
    This exclusive part of the city has a price tag to match the beauty of its older homes, but it’s also well worth looking into for the historic nature of the old properties.
  • South Tampa
    Though this is an historic part of the city, it’s beloved by young families and professionals thanks to its accessibility and eclectic mix of restaurants and shopping.

These are just some of the best neighborhoods in the Tampa area. Hyde Park, Davis Islands, and Land-O-Lakes are some other expensive neighborhoods that might just have your dream home within them. Narrowing down potential Tampa homes that are close to job opportunities without having higher prices is the key to finding the right house in this market.

Takeaways about the Tampa, FL real estate market

Tampa, FL home for sale

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Though there are seasonal fluctuations in home prices in general, in the current Tampa Bay housing market, the best price is going to keep going a little higher.

In the last year, the median number of days that a home stays on the market in Tampa is just eleven days! Whether you’re a first time buyer or are selling your previous home to buy a new one, you’ll want to make sure that you’re on your game to get the home that will work for you.

Almost one in three Tampa home sales is a cash deal. Forty percent of homes in the Tampa Bay area sell over list price.

With all of this in mind, the most important thing for you to do if you’re on the hunt for a home in Tampa Bay is to prepare yourself by learning about the market. The more educated you are about the Tampa real estate market, the easier it will be for you to navigate the hot real estate market in this area.

Brett Riggins

Brett Riggins

Founder of Connect Home Buyers Brett Riggins started his real estate journey after graduating from Western Michigan University in Construction Engineering. After completing his first few residential flips, him and his wife Arin started Connect Home Buyers LLC, and today, they help homeowners sell their property quick and hassle-free.

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