What are Tampa housing market predictions for 2019? How does the market really look?
After several years, when the economy was soaring, the unemployment rate kept falling, and the housing market got red hot, it’s certainly plausible to ask if 2019 might finally be the year that puts the brakes on all this growth. And more than a few economists have been asking that question in recent months.
But for those getting nervous that we’re in a possible housing market bubble, the consensus is that 2019 seems likely to offer … well, more of the same.
Job growth. A healthy and vibrant economy. And a strong housing market.
So the question is, why are the experts so confident that 2019 will be another good year for American workers, and a continuation of a secure housing market?
Tampa Housing Market Predictions for 2019? Where’s the Market Headed?
It’s been said that all good things must come to an end, but economists – who note that the U.S. economy is on its strongest roll ever – with the return of high employment – are not predicting a downturn in 2019. In fact, the job growth and low unemployment that Americans have enjoyed in the past few years is expected to continue once the new year begins, which in turn should continue stimulating the nation’s real estate market. When the economy is good, people opt to buy homes.
Skeptics point out that housing sales slowed down in 2018, which is true. The experts in the housing industry counter that this wasn’t because of a lack of interest among prospective buyers, but because inventory was so low – there simply weren’t enough homes on the market to meet buyer demand. As a result, home prices soared, even as sales went down.
Will anything change in 2019?
Possibly, since housing industry experts are anticipating an increase in foreign property investments in 2019, as well as an increase in new home construction, particularly compared to the past few years. Whether new construction will match buyer demand is unclear because analysts also believe that in 2019 there will continue to be supply shortages in some parts of the country.
What’s Likely to Change Next Year?
While it’s hard to conclusively say whether it will be a seller’s or buyer’s market throughout 2019, or whether home prices will start cooling down in some parts of the country, economists say they expect to see several trends in the 2019 U.S. housing market, starting with the most important: continued growth in the U.S. economy.
All of the key data on the economy – job growth, new career opportunities, high employment and rising wages – paint a positive and optimistic picture for the next six months, which should help to stimulate the real estate market.
And just as the economy helps convince prospective buyers to get into the market, analysts predict it will encourage more foreign property investors from countries like Canada, China, and Singapore to buy investment properties here, further boosting home sales.
While few predict a quick end in sight to the 2018 trends – strong demand for homes combined with low inventory in many cities – experts say new housing construction should increase, providing more options for prospective buyers.
Experts also say they expect to see more millennials driving growth in the housing market. They’re a large demographic group that’s getting older, settling down, and showing more interest in home buying. The strong economy is helping to fuel that, as more millennials settle into good-paying careers and become more comfortable with taking out mortgages.
One factor that experts are watching closely is mortgage rates, which have been rising throughout 2018, with the average rate for a 30-year fixed mortgage in 2017 hovering just below 4%, then climbing this year before reaching 4.57% in June, according to Freddie Mac. The Mortgage Bankers Association recently updated its long-range forecast, and now predicts that the average 30-year mortgage rates would rise above 4.9% in 2019.
But that’s not expected to significantly weaken the U.S. housing market, and in fact, the real estate website Zillow is still predicting that home prices will keep rising by 6.5 percent in 2019.
Of course, increasing home prices are likely to vary by region, and there are predictions for slowdowns in cities that have experienced the largest jump in home prices, like New York, Los Angeles, Seattle and San Francisco. In those cities, prices have gotten so high that many prospective buyers, especially millennials, can’t afford the sky-high prices. With home prices pushing beyond people’s capacity to pay, Realtor.com reported that home price relief appears to be on the way for prospective homebuyers in high-price West Coast cities.
But that’s not the case in Florida and in cities like Tampa, where prices have remained much closer to the national average and are unlikely to drop.
How Is Tampa’s Housing Market Doing?
Just like in the rest of the nation, home sales in the Tampa Bay area dropped over the normally busy summer home buying season, because inventory was low. And prices rose there.
But prices have not gotten so high as to become unaffordable to most prospective buyers. According to Zillow, the median home value here is $218,000, and Tampa home values have gone up 11.2% over the past year, with the median price of homes in Tampa now at $268,000. Zillow predicts those prices will rise 8.4% in the next year.
What may change in Tampa Bay in 2019 is more homes being built. Construction started on nearly 3,000 homes in the Tampa Bay area in the third quarter of 2018, according to Metrostudy, which tracks housing starts in the bay area.
Metrostudy noted that 2,946 single-family homes came out of the ground in the third quarter, an increase of 5.1 percent from the third quarter of 2017.
That new construction is boosted by Tampa’s strong jobs growth throughout 2018, making the area a magnet for people looking for job opportunities and affordable homes.
Tampa’s unemployment rate was at a historic low of 4% in January 2018, but dropped throughout the year to 2.9% in September, lower than Florida’s unemployment rate of 3.0% and the national average of 3.7%. As Tampa has continued to create new jobs, that’s spurred more interest in the housing market. Metrostudy calculated that for every 30,000 new jobs created in Tampa Bay, 11,000 new homes start construction.
And with inventory still low, private builders like Domain Homes have been constructing new homes to meet the needs of the city’s prospective homebuyers.
In fact, economists say one of the strengths of the economy today is there isn’t a glut or oversupply of homes on the market, a situation that could cause prices to plummet if there’s an economic downturn. Instead, any slowdown in the economy seems less likely to impact the housing market since inventory remains low.
So are the Tampa housing market predictions for 2019 positive? The answer: yes.
This year is ending with a strong economy complementing the vibrant housing market, and growth in the United States has been strong, with GDP growth in the range 3.5%-4.00%.
Economists are quick to point out that economic expansions don’t necessarily die of old age. Even if expansion has lasted for a long time, that doesn’t mean an economic crash is right around the corner.
And with the national economy remaining healthy, now is still a very good time to get into the housing market – particularly in cities like Tampa, where prices remain affordable and homes purchased in the next few months will continue to rise in value.
Today, plenty of families are moving to Tampa Bay, attracted by the strong economy. Add to the mix great cultural amenities and the appeal is obvious.
The newcomers relocating to Tampa for that strong jobs market arrive needing someplace to live, which is why builders like Domain Homes are constructing new houses here, anticipating the strong demand.
Domain Homes procures older, dilapidated houses in some of the city’s most appealing neighborhoods, and replaces them with brand new, move-in ready homes.
The neighborhoods that Domain Homes builds in includes highly sought-after, established neighborhoods like South Tampa, West Tampa, the Heights, and St. Petersburg. These locations offer top-rated schools, are near downtown cultural amenities and shopping, and are where there are good jobs.