When a city does exceptionally well throughout the year — as Tampa Bay’s economy and housing market has done in 2018 — a big question, once the new year arrives often, is: How do you top that?
Having a great economic year often leads to a new challenge. And that’s meeting those same high expectations the next year. But one thing Tampa has in its favor is that predictions for another solid year are not based simply on lofty ambitions. A number of real estate experts think Tampa is poised for another strong market in 2019.
In a report on “Florida Housing Forecast 2019,” author Gord Collins noted that the forecast for the nation’s housing market in 2019 was “very warm” based on rosy predictions for the strength of the U.S. economy. Florida’s housing market is also projected to do very well next year.
The study also found that the Tampa/Sarasota housing market is “hot,” ranking sixth in loan applications from those ready to move, while property prices have gone up by a strong 14.7%.
The study predicted that housing prices should continue rising in Florida over the next five years.
“The housing market in Miami, Tampa, Orlando, Panama City, Sarasota, Naples, Fort Lauderdale, and even Boca Raton are compelling real estate investment value propositions for snowbirds and other buyers in North America,” he wrote. “Interest in buying Florida properties is persistent and given the strength of the Florida economy, and tax situation in the Sunshine State, and an aging population, we should see strong prices for many years.”
Likewise, the real estate website Zillow noted that Tampa home values have gone up 9.8% in the past year and Zillow predicts they will rise an additional 6.5% in the next year.
Tampa also ranks within the Top 30 among the nation’s Top 100 housing markets, according to Realtor.com.
Why are sites like Zillow and Realtor.com so confident about what the new year will bring to Tampa? Partly it’s due to the strength Tampa Bay demonstrated throughout 2018, in terms of both the housing market and the economy.
Let’s briefly look back at last year …
How Strong Was the Tampa Economy in 2018?
Throughout 2018, it was clear Tampa Bay’s economy had gained considerable strength. It was an economy on steroids.
Tampa’s unemployment rate fell to 3.6 percent in August, lower than the national average of 3.9 percent or the statewide average of 3.7 percent.
In September, the office of Governor Rick Scott announced that the Tampa area added 34,600 new private-sector jobs in the past year. That was the second-highest number of jobs created among all Florida metro areas.
The Tampa Bay area demonstrated strength in several top industries, including leisure and hospitality (which created 10,300 new jobs), and education and health services (8,100 new positions created).
The Tampa area also remained first among the state metro areas for job demand in August, with 43,913 openings.
That’s a highly impressive performance, considering that the unemployment rate in Tampa had peaked in December 2009 at 11.9 percent at the height of the national recession, and today it’s 8.6 percentage points lower.
Tampa Bay also leads both Florida and the South when it came to job creation, according to a report from online job posting service ZipRecruiter.
The company’s Hiring Demand Index, based on relative monthly job growth percentage, gave Tampa Bay a score of +140. That’s double the rate of the second-place region, Dallas-Fort Worth-Arlington
ZipRecruiter noted that Tampa Bay became a magnet for job creation in a variety of fields. That includes high tech, health care, and other top paying industries.
As a result, a lot of newcomers moved to Tampa Bay throughout this year in search of job opportunities. That’s provided a big boost to the region’s housing market. According to Zillow, the median price of homes currently listed in Tampa is now $275,000.
Overall, that’s quite an impressive performance! Can Tampa expect a repeat in 2019?
How Can We Predict Tampa’s Future Performance?
The United States Housing Report, which looks at forecasting trends from sources like the National Association of Realtors, Trulia, Freddie Mac, Zillow, Case Shiller and others, projected that the Tampa-St. Petersburg-Clearwater housing market would be the 17th best performing nationally in 2019.
Several other Florida cities, including Miami and Orlando, were also in the Top 30.
Realtor.com noted that Tampa Bay ranks higher than the national average in several categories. That includes employment growth, household growth, and low unemployment.
More importantly, Tampa Bay ranked well when it came to new-home starts.
Inventory has been one of the biggest challenges for buyers. That’s not just in Tampa and across the rest of Florida, but also nationally. There’s been a serious shortage of homes available on the market all year long.
Why Are Sales Dropping But Prices Rising?
In fact, sales dropped between June and August. That’s typically one of the hottest times of the year for home sales.
But the drop in sales wasn’t because buyers were disappearing. Instead, it was because the inventory has remained low in 2017 and 2018.
There simply were not enough homes on the market to meet the sky-high buyer demand across the country, and that was often the case in a lot of top Florida markets as well.
And even though sales dropped, prices went up, as the few homes on the market became more highly desirable to buyers.
However, the U.S. Housing Market Report 2019 sees no reason to presume housing will be on a downward trajectory next year, since the U.S. economy is projected to grow by 3-5% next year, with both employment and housing construction increasing, along with U.S. wages rising.
All of that, the report indicates, means we’ll see more Americans buying a home in 2019.
What may be different next year, the report suggests, is more people buying their first home, since in 2017 and 2018, the lack of inventory and rising prices made it particularly challenging for first-time buyers to get into the market.
In 2019, the report suggests, more Millennials will jump into the market, increasing demand for housing.
And housing stock on the market is also expected to increase as construction rises.
Overall, it’s expected to be a good year for home builders, mortgage agents, furniture makers, and anyone else who contributes to fulfilling the pent-up demand for homes across the U.S. in general and Florida in particular.
Realtor.com is also projecting that when it comes to home sales growth, cities in the South are likely to rank higher than the national average.
The South, the website noted, is drawing in residents thanks to lower real estate costs, a lower cost of living in general, strong economic growth and a more accommodating attitude toward builders.
No question, Tampa Bay has enjoyed a great 2018. If history is any guide, 2019 should be another winner for the city and its surrounding metro area.
For buyers, that means it makes no sense to delay your housing search in the hope that prices will magically drop. Home prices are only headed in one direction, and that’s up.
If you’re a prospective home buyer looking to buy a home in the Tampa Bay area, now is a good time to reach out directly to an established builder like Domain Homes, which is constructing homes in some of the most highly sought-after neighborhoods in the region.
Domain Homes defines itself as the city’s urban renaissance new home builder. They procure home sites in highly desirable Tampa Bay neighborhoods like South Tampa, West Tampa, North Hyde Park, the Heights, and St. Petersburg. These are areas close to highly rated school districts, cultural attractions, and shopping in downtown.