Tampa is one of the hottest US real estate markets. Check out our Tampa housing market predictions to see if they’re still good for 2023.
Table of Contents
- How Has the Tampa Housing Market Performed So Far in 2022?
- What’s Next for the Tampa Housing Market?
- Top Tampa Housing Market Locations to Invest in 2023
Tampa is one of the top locations for investing in real estate. In fact, in the past couple of years, the demand for housing was so high that buyers were compelled to go through bidding wars. Homebuyers and real estate investors were forced to compete for the available listings, making cash offers equivalent to or even higher than the asking price.
Tampa’s continuously thriving economy, along with the steady job growth created by various businesses, is one of the main reasons many people are moving to the city. With the rising population, the Tampa real estate market becomes hotter and hotter each year. In fact, home prices in Tampa keep rising, and many residents are left with no better alternative but to rent.
According to Florida housing market predictions, Tampa offers a great opportunity for rental property investors. Fortunately, while home values are increasing, there are still affordable properties that are available for sale. Investors who can find properties at reasonable prices in good locations have a high chance of strong appreciation over a few years.
To find good investment properties, it’s best to work with Mashvisor, which allows you to easily search for properties for sale in your chosen area based on your specific budget.
In this article, we will learn that:
- Tampa housing market thrived amid the pandemic
- Home prices in Tampa are expected to rise
- The demand for housing remains high
How Has the Tampa Housing Market Performed So Far in 2022?
Tampa is one of the best-performing markets throughout the US, even during the pandemic. Investors are buying income properties in the Tampa Bay area even before 2020. Moreover, the number of people investing in Tampa even increased significantly despite the onset of the pandemic. Today, the Tampa housing market remains one of the hottest markets in the US.
According to Mashvisor’s data, as of September 2022, the median property price in Tampa ranges from $346,013 to $1,115,744, with an average price per square foot of between $247 and $562. Currently, listings for sale number around 1,826, and the inventory keeps getting increasingly scarce due to the increase in housing demand from both homebuyers and investors.
Because of the low inventory, the Tampa housing market predictions point out that many homebuyers are finding it hard to find a home they can afford. It is why many Tampa residents choose to rent instead. In fact, as per Mashvisor’s September 2022 data, the current price to rent ratio in Tampa is 20, which is considered high.
A high price to rent ratio means it’s more practical for residents to rent than buy a home. As such, rental property owners see more opportunities for business. It is also one of the reasons why many rental property investors are investing in the Tampa housing market, and the trend is expected to continue in 2023 and beyond.
In fact, traditional real estate investors in Tampa benefit from an average cash on cash return of 3.19%, which can go as high as 5.41%. Currently, there are only around 1,465 traditional listings available in Tampa. It means that the traditional rental market still offers more opportunities for new investors.
Related: How Is the Tampa Florida Real Estate Market in 2022?
Tampa Housing Market Predictions 2023: Home Prices
The average median price in Tampa as of September 2022 is $614,497, which is significantly higher than the US average of $440,300. The high demand and low inventory are causing the home values to shoot up. While the prices of Tampa residential properties keep rising fast, houses in Tampa are still considered affordable compared to other cities in the country.
As mentioned, many real estate investors are taking advantage of the hot Tampa housing market. Since experts believe that Tampa properties will appreciate in 2023 and beyond, investors are buying properties and getting hold of them before selling them at a higher price.
Even though there are still affordable properties for sale in Tampa, not all buyers can get hold of them because of the tough competition. Since many residents cannot find a property that they can afford to buy, renting is their best option. It is why the best strategy for Tampa investors is to buy properties and rent them out as traditional rentals.
Tampa Housing Market Predictions 2023: Inventory
According to Mashvisor, there are around 1,826 available listings for sale in the Tampa real estate market as of September 2022. With the current population of 394,809, which is continuously growing at a steady pace of 1.26% annually, the number of available houses for sale may not be sufficient. In general, the inventory in the Tampa real estate market is declining.
The increasingly high demand in Tampa is one of the major factors that affect its inventory. Currently, the supply cannot keep up with the demand. However, Tampa aims to create around 10,000 homes at affordable prices by 2027, which could help ease the low inventory in the city.
Tampa Housing Market Predictions 2023: Demand
With low inventory and high demand, Tampa’s housing prices are expected to continue to rise in 2023. But where exactly is the demand coming from?
Many people from other states move to Florida because of its warm weather, favorable tax laws, and beautiful scenic views. Because the pandemic allows many workers to work from home, it opens an opportunity for many individuals to move to a better city without leaving their jobs.
In addition to its pleasant weather, the state’s affordable housing also attracts out-of-state residents. The sudden increase in population growth is one of the factors driving the demand for Tampa real estate since the start of the pandemic, and it is expected to continue to rise in 2023 and later years.
What’s Next for the Tampa Housing Market?
As per the Tampa housing market predictions in 2023, the Tampa housing market will remain hot. Experts believe home prices will continue to go up amid the rising demand. New inventories are not expected to become available any time soon in 2023.
However, while new houses are now being built and may ease the inventory issues a little bit, the inventory may still not keep up with the high demands.
Here are the Tampa housing market predictions for 2023, according to experts:
1. Tampa’s Population Will Continue to Grow
According to World Population Review, Tampa is currently home to almost 395,000 people, based on the latest US Census estimates. Tampa’s population increased by around 10,000 over the past two years. The population growth is significantly affecting the Tampa housing market, creating more demand for housing that is also impacting the available inventory and home prices.
Tampa is one of the most populated cities in Florida, ranking third after Jacksonville and Miami. It is also the 52nd most populous city in the US. Based on the projections of Tampa Hillsborough Economic Development Corporation, the population in Hillsborough County will reach 1.5 million or more at the end of 2023.
Experts’ predictions point out that the steady population growth in the Tampa Bay area is one of the factors that will keep Tampa real estate a hot market. With many people wanting to move to Florida, particularly to the Tampa Bay area, we can expect that the demand for Tampa housing will continue to rise in 2023 and over the years.
2. New Jobs Will Continue to Attract New Residents to Tampa
By mid-2022, the labor force in the Tampa area grew by 64,982, which is equivalent to a 4.1% increase from the previous year. Because of the available new jobs in Tampa, the unemployment rate is down to 2.7%, making the city one of the best places for finding employment opportunities.
In addition, the Tampa area gained the second highest private sector jobs among other metro areas in Florida. With around 65,500 new private sector jobs in mid-2022, Tampa continues to attract new residents to move into the city. Plus, the average per capita income in Tampa is $37,834, which is slightly higher than the US average of $35,384.
The overall thriving economy in Tampa, along with its significant job growth, is another reason why the Tampa housing market predictions are generally optimistic.
3. Tampa’s Affordable Cost of Living Also Attracts Migrants
One of the reasons why more Americans from other states want to move to Tampa is the city’s affordable cost of living compared to other cities in the United States. In fact, Tampa’s affordability is what makes the city a top destination for retirees and young professionals looking to improve their quality of life.
According to Payscale.com, Tampa’s general cost of living is 5% lower than the national average. Also, compared to the US average, housing expenses and utility prices in Tampa are 11% and 2% lower, respectively. Moreover, transportation costs like fuel and bus fares are cheaper by 2%, and healthcare expenses are 4% lower than the national average.
In addition, Florida boasts favorable tax laws that are highly sought-after by many Americans from other big cities like New York. In general, people looking to improve their quality of life often think of moving to Tampa due to its job opportunities, near-perfect weather conditions, natural views, and recreational facilities.
Related: Are Florida Houses Cheap in 2022?
4. Tampa Home Prices Will Remain High in 2023
The Tampa housing market will remain one of the hottest real estate markets in the United States in 2023 and beyond. With the thriving economy, growing job opportunities, and steady population growth, the demand for housing will continue to surge.
New residents will continue to arrive in Tampa, needing a home to stay in. However, the current housing inventory in Tampa cannot keep up with the demand for residential properties from both homebuyers and investors. It means that as buyers will continue with their bidding wars, home appreciation rates in Tampa are growing faster than in most other cities.
In fact, the Tampa housing market demonstrates an average annual appreciation rate of 5.76%. Home values in Tampa are up 247.45% compared to the year 2000 levels. Because of the high appreciation rate, less than half of Tampa’s population owns a house. With the high price to rent ratio of 20, more than half of the population are renters.
According to ABC Action News, plans to build new homes are now in place, but the new homes will not be available in 2023 or any time soon. If all goes well, experts expect to see newly built homes added to Tampa’s for-sale inventory by 2027.
5. The Traditional Rental Market Will Continue to Thrive
With the high price to rent ratio, Tampa residents will find renting a home a more practical option than buying one. In addition, as the thriving local economy attracts more residents, it will result in an increase in demand for housing in the Tampa real estate market.
It is one of Tampa’s housing market predictions that the high housing demand expected in 2023 will also consequently raise home prices. As a result, the Tampa traditional rental market will continue to thrive. Rental property investors who want to take advantage should better start looking for an affordable home for sale to rent out for the long term.
Since more than 52% of Tampa’s residents are renters, the traditional rental market offers a good opportunity for new investors planning to invest in Tampa. According to Zumper, the average rental rate for a one-bedroom apartment in Tampa is $1,764, which is a 10% increase from last year. Two-bedroom houses rent out for an average of $2,015, up 12% from the previous year.
The common types of residential properties in the Tampa real estate market are single family homes and apartment complexes. Homes with better amenities can rent out at a higher rate than those with only standard amenities.
6. The Tourism Industry Keeps the Demand for Airbnb Rentals High
According to expert predictions, the continuously growing tourism in Tampa will keep the demand for vacation rentals high. Since the lifting of travel restrictions across the US, Tampa expects to see an influx of visitors to the city. As a result, increased demand for vacation rentals is also expected.
In fact, in 2021, Tampa received around 14.8 million visitors, which is almost the same as its pre-pandemic levels. Most visitors were local because many international tourists were apprehensive about traveling last year. However, since international travel is now lifted, Tampa expects to see a significant increase in the number of visitors in 2023 and the years to come.
Due to the projected recovery in tourist numbers, the Airbnb rental market is also an excellent investment strategy in Tampa, Florida. After all, the city is one of the top tourist destinations in the US, with its scenic views, warm weather, and beautiful beaches. If you want to take advantage of the growing Airbnb rental market in Tampa, it’s best to find a property near the most visited attractions.
Top 10 Tampa Housing Market Locations to Invest in 2023
The Tampa housing market is great for both traditional and Airbnb rentals. Based on the Tampa housing market predictions mentioned above, the long-term rental market in Tampa is an excellent option if you want to take advantage of the growing population and thriving economy.
Since Tampa is one of the most favorite locations to migrate to, the influx of new residents is one of the reasons why the demand for housing in Tampa keeps surging.
Similarly, the Airbnb rental market in Tampa also offers a good opportunity because of the city’s growing tourism industry. Tampa is known for various world-class attractions, including the gigantic Florida Aquarium and Busch Gardens. It is also famous for its scenic parks, art galleries, contemporary museums, cigar factories, restaurants, and vibrant sidewalks.
When finding a profitable investment, it’s crucial to consider important factors such as the median property price, cash on cash rate, cap rate, and occupancy rate.
Related: What Is a Good Cash on Cash Return?
You can use Mashvisor to find profitable investment properties in Tampa, Florida
5 Best Tampa Neighborhoods for Traditional Rentals
The best Tampa neighborhoods for traditional rentals are those that are close to basic amenities and public transport. Places where there are several job opportunities are also ideal for investing in traditional rentals. It is because most of the working residents would love to stay somewhere near where their job locations are.
We’ve selected neighborhoods with a median price of below $1 million and provide a traditional rental income of $2,000 or higher. We also consider those with a price to rent ratio of 15% or higher and generate cash on cash return of above 2%. Areas with a good walk score are a plus.
Here are the top five Tampa neighborhoods that are best for traditional rentals, arranged from those with the highest to the lowest cash on cash return, based on Mashvisor’s September data:
1. Oakford Park, FL
- Median Property Price: $598,508
- Average Price per Square Foot: $346
- Days on Market: 67
- Monthly Traditional Rental Income: $3,219
- Traditional Cash on Cash Return: 4.41%
- Traditional Cap Rate: 4.48%
- Price to Rent Ratio: 15
- Walk Score: 61
2. South Seminole Heights, FL
- Median Property Price: $540,078
- Average Price per Square Foot: $337
- Days on Market: 101
- Monthly Traditional Rental Income: $2,690
- Traditional Cash on Cash Return: 4.97%
- Traditional Cap Rate: 3.05%
- Price to Rent Ratio: 17
- Walk Score: 71
3. Tampa Heights, FL
- Median Property Price: $729,484
- Average Price per Square Foot: $338
- Days on Market: 140
- Monthly Traditional Rental Income: $2,705
- Traditional Cash on Cash Return: 3.24%
- Traditional Cap Rate: 3.30%
- Price to Rent Ratio: 22
- Walk Score: 71
4. Bon Air, FL
- Median Property Price: $675,602
- Average Price per Square Foot: $367
- Days on Market: 96
- Monthly Traditional Rental Income: $3,036
- Traditional Cash on Cash Return: 2.72%
- Traditional Cap Rate: 2.77%
- Price to Rent Ratio: 19
- Walk Score: 72
5. Ridgewood Park, FL
- Median Property Price: $937,250
- Average Price per Square Foot: $424
- Days on Market: 49
- Monthly Traditional Rental Income: $2,904
- Traditional Cash on Cash Return: 2.32%
- Traditional Cap Rate: 2.35%
- Price to Rent Ratio: 27
- Walk Score: 44
Do you want to benefit from the growing Tampa traditional rental market? Find the best Tampa investment property now using Mashvisor’s investment property search tool.
5 Best Tampa Neighborhoods for Airbnb Rentals
When choosing the best Tampa neighborhoods for Airbnb rentals, you should consider how strong the tourism industry is in the area. It’s best to find a location that is close to a variety of tourist attractions. Also, the neighborhood’s walkability, as well as the available access to public transportation, can greatly affect your profitability as a vacation rental investor.
We’ve selected Tampa neighborhoods with a median price of below $1 million and earn an Airbnb income of above $2,000. We also consider areas with an Airbnb occupancy rate of 40% or higher and generate cash on cash return of above 1%. Neighborhoods with a high walk score are prioritized.
Here are the top five Tampa neighborhoods that are best for Airbnb rentals, ranked in descending order in terms of cash on cash return (based on Mashvisor’s September data):
1. Ybor City, FL
- Median Property Price: $346,013
- Average Price per Square Foot: $247
- Days on Market: 61
- Monthly Airbnb Rental Income: $2,026
- Airbnb Cash on Cash Return: 2.95%
- Airbnb Cap Rate: 3.03%
- Airbnb Daily Rate: $148
- Airbnb Occupancy Rate: 45%
- Walk Score: 59
2. Old West Tampa, FL
- Median Property Price: $405,973
- Average Price per Square Foot: $262
- Days on Market: 20
- Monthly Airbnb Rental Income: $2,259
- Airbnb Cash on Cash Return: 2.60%
- Airbnb Cap Rate: 2.66%
- Airbnb Daily Rate: $146
- Airbnb Occupancy Rate: 44%
- Walk Score: 47
3. Northeast Macfarlane, FL
- Median Property Price: $494,466
- Average Price per Square Foot: $310
- Days on Market: 64
- Monthly Airbnb Rental Income: $2,575
- Airbnb Cash on Cash Return: 2.47%
- Airbnb Cap Rate: 2.52%
- Airbnb Daily Rate: $144
- Airbnb Occupancy Rate: 45%
- Walk Score: 82
4. Oakford Park, FL
- Median Property Price: $598,508
- Average Price per Square Foot: $346
- Days on Market: 67
- Monthly Airbnb Rental Income: $2,826
- Airbnb Cash on Cash Return: 2.38%
- Airbnb Cap Rate: 2.42%
- Airbnb Daily Rate: $148
- Airbnb Occupancy Rate: 46%
- Walk Score: 61
5. West Riverfront, FL
- Median Property Price: $578,613
- Average Price per Square Foot: $336
- Days on Market: 124
- Monthly Airbnb Rental Income: $2,532
- Airbnb Cash on Cash Return: 1.29%
- Airbnb Cap Rate: 1.31%
- Airbnb Daily Rate: $153
- Airbnb Occupancy Rate: 45%
- Walk Score: 61
Are you ready to invest in the Tampa Airbnb market? Start searching for a profitable Airbnb property in Tampa using Mashvisor’s investment property search tool.
Tampa Housing Market Trends Are Generally Good
With the Tampa housing market predictions mentioned above, the city’s housing market is not expected to cool off any time soon. Fortunately, despite the rising house prices in Tampa, there are still certain neighborhoods that offer affordable housing. If you’re planning to invest in Tampa real estate, now is the perfect time to do so while there are still listings available for sale.
The good news is that you can easily find a profitable investment property for sale through Mashvisor’s database. All you need to do is type the neighborhood where you plan to invest in, and you’ll be provided with all the necessary real estate data to help you make a decision. You can also view the rental comps to know the property’s profitability.
With Mashvisor, you can access the average rental income, cash on cash return, occupancy rate, and expected cash flows of the property. You can also use Mashvisor’s rental property calculator so you can compute your potential income based on the expected expenses and your preferred financing method. What’s more, you can also customize the expenses so you’ll get an accurate result.
Since the Tampa real estate market is great for both traditional and Airbnb investments, deciding on which investment strategy to pursue can be intimidating. If you’re a new investor, you may not know how to choose the best rental strategy for a particular income property.
If you choose to work with Mashvisor, you’ll not encounter any trouble deciding on the best investment strategy. It is because the real estate platform’s comprehensive rental analysis can help you choose the best strategy for your chosen property. Mashvisor takes the guessing game out of the way and your decisions will only be based on accurate figures.
