With housing inventory down but home sales up across the state’s housing market as a whole, how is the real estate market in Tampa, Florida?
Tampa Housing Market Forecast and Trends 2020
The Tampa-St. Petersburg metro area is one of the hottest markets for Florida real estate. With plenty of opportunities, the Tampa real estate market is always keeping real estate investors on the lookout. The metro population rounds up to be over 3 million people. A big chunk of which probably lives there because of the area’s strong job market and economy. Median household income in Tampa is $53,204. Ranking 32 out of the 200 cities included in the Forbes Best Places for Business and Careers list, it’s clear that beaches aren’t the only thing drawing people to the Tampa, Florida real estate market. Now that we’ve had a quick overview of the city, let’s get into some of the major reasons why you should be joining Tampa real estate investors in 2020.
1) Stable Real Estate Market Growth
With talk of housing bubbles and sharp spikes and drops in home prices happening in other markets across the country, a stable real estate market is your best bet at a successful investment location next year. The median home value in the Tampa housing market is $220,100 which is 2.4 percent higher than it was 12 months ago. It has had a sustainable and consistent year-over-year growth rate in real estate appreciation (appreciating from around $85,000 in 2012 to a projected $220,000 in 2020). Based on historical Tampa real estate market trends and stats, it’ll remain a strong and competitive market throughout 2019 and into 2020.
2) Increasing Home Prices, But Still Affordable
Buying an investment property in Tampa isn’t as expensive as other parts of the state. Tampa houses for sale closed at an average of $246,000 over the last month, according to Redfin. That’s a 7.2 percent increase from the same time last year. As the market heats up due to a disbalance in real estate supply and demand, it makes sense to see upward pressure on the price of Tampa investment property. But even with that price increase, it’s still more affordable to invest in Tampa real estate than in a majority of other cities in Florida. The average selling price in the Florida real estate market is $339,003 (a 3.2 year-over-year increase). Relative affordability is a trend we will continue to see in the 2020 Tampa market.
3) Strong Rental Market
How are the Tampa real estate market conditions in regard to rental property performance? It’s important to conduct a real estate market analysis when searching for investment property in any market. But that can take months of work. Why waste your time when Mashvisor’s rental property calculator has all the necessary data for you? Here is the most accurate and reliable data for the Tampa real estate market:
- Median Property Price: $373,315
- Price per Square Foot: $191
- Average Days on Market: 78
- Price to Rent Ratio: 18
Florida cap rates by city differ, but Tampa’s got a strong average compared to some other cities. Here’s the average rate of return to expect when you buy rental property in the Tampa real estate market:
- Monthly Traditional Rental Income: $1,739
- Traditional Cap Rate: 1.8%
- Monthly Airbnb Rental Income: $2,717
- Airbnb Cap Rate: 3.8%
- Airbnb Occupancy Rate: 55%
Thanks to all of the other positive trends in this forecast, rental property performance will continue to go strong in 2020.
4) Fast-Growing Metro
It isn’t just the Tampa real estate market getting all the attention, other industry sectors are performing well also. The major industries in Tampa are defense, financial services, and technology. It’s also home to many prominent institutions which help develop the medical and tech research in the area. As a prime vacation destination with a high quality of life, the tourism industry is also thriving here. A strong Tampa housing market 2020 is reflected by the fast-growing metro and strong economy it has.
5) No Airbnb Regulations So Far
With new short term rental regulations being enforced in cities across the nation, one’s got to wonder about Tampa Airbnb laws. The State of Florida has banned local governments and municipalities from passing laws that prohibit short term rentals, but it does require all vacation rentals in the state to be licensed through the DBPR. So far, there have been no city level or county level ordinances passed.
However, Airbnb did reach an agreement with Hillsborough County on tourist taxes, which really helped boost the economy. According to our data, there are over 1000 active Airbnb listings in the Tampa real estate market. Last year, Florida welcomed a record-breaking number of tourists- 111.8 million. Hillsborough County made $673.5 million in Tourist Development revenue in that same period, making it one of the best places to buy a vacation home in Florida. The county has been experiencing steady growth in tourism revenue since 2014, and this trend is expected to continue on in 2020 and beyond.
The Best Neighborhoods in Tampa
So, should you invest in Tampa real estate next year? YES! But, we can’t tell you to make a Tampa real estate investment in 2020 without also giving you our data on the projected top-performing neighborhoods in the market. Using our investment property calculator, we’ve pulled data on the places where you’ll have the best chances of finding a strong rental income, good cash on cash return, and a high Airbnb occupancy rate.
We’ve divided the list of top-performing locations based on rental strategy. Where are vacation rentals a good investment in the Tampa real estate market? Let’s take a look at the best neighborhoods for Airbnb Tampa to find out:
- Median Property Price: $180,419
- Price per Square Foot: $121
- Average Days on Market: 50
- Monthly Airbnb Rental Income: $3,308
- Airbnb Cap Rate: 14.2%
- Airbnb Occupancy Rate: 45%
Port Tampa City
- Median Property Price: $335,142
- Price per Square Foot: $191
- Average Days on Market: 49
- Monthly Airbnb Rental Income: $4,867
- Airbnb Cap Rate: 9.7%
- Airbnb Occupancy Rate: 61%
- Median Property Price: $159,950
- Price per Square Foot: $112
- Average Days on Market: 21
- Monthly Airbnb Rental Income: $2,288
- Airbnb Cap Rate: 9.6%
- Airbnb Occupancy Rate: 57%
So those are a couple of places to check out if you’re planning on buying an Airbnb property. But for the Tampa real estate investors looking for the best locations for long-term rental property performance, these neighborhoods are going to be your best chance:
- Median Property Price: $174,693
- Price per Square Foot: $205
- Average Days on Market: 70
- Monthly Traditional Rental Income: $1,345
- Traditional Cap Rate: 3.6%
- Median Property Price: $199,999
- Price per Square Foot: $195
- Average Days on Market: 59
- Monthly Traditional Rental Income: $1,453
- Traditional Cap Rate: 3.1%
- Median Property Price: $204,502
- Price per Square Foot: $131
- Average Days on Market: 62
- Monthly Traditional Rental Income: $1,147
- Traditional Cap Rate: 3.1%
Clearly, the Tampa real estate market is performing very strongly and has plenty of investment opportunities. But if you want to find the best investment properties, I recommend you sign up for a free Mashvisor account and use our Property Finder, just one of our great real estate investment tools.