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Our Views On The 2021 Tampa Bay Housing Market
Dated: January 5 2021
Our Views on the 2021 Tampa Bay Housing Market
The Tampa Bay housing market was a shining star in 2020, ranked #20 for sales and growth in the ENTIRE United States housing market according to Realtor.com's latest housing market outlook for 2021. As we head into 2021, can we expect our real estate market to continue these growth trends? Here’s what we think about the year ahead:
Mortgage rates will continue to be historically favorable.
Even with rising prices, historically low mortgage rates are keeping homes affordable for many buyers out there. A home that has risen $10k in price since last year, still has a LOWER mortgage payment this year vs last year, thanks to steep drops in mortgage interest rates. Mortgage Professionals and the Fed both agree there will likely be no drastic jumps in interest rates in 2021.
Inventory is LOW, which will continue to drive up home prices in the St. Petersburg-Clearwater-Tampa areas.
We expect sales to grow about 7 percent in the Tampa Bay, FL area and prices to rise another 8 percent on top of 2020’s already high levels. A balanced housing market often has about 5-6 months of housing inventory available at any given time. Currently, the Tampa Bay housing market is sitting at UNDER 1.5 months of housing inventory, meaning there is not nearly enough inventory available for all the buyers out there. If the number of homes on the market tripled in the next 6 months, we'd still have a STRONG sellers market in Pinellas and Hillsborough County.
The Shortage of Lumber and Vacant Land is Driving Up Prices of New Construction Homes.
The VP of the Tampa Bay Builders Association recently shared similar sentiments in this article, explaining that home buyers are relying on builders to fill the housing inventory gaps around Tampa Bay. However, with a lumber shortage and not much vacant land left in Pinellas County, builders are facing their own supply issues. With home builder confidence near record highs, we expect continued price gains for single-family new construction homes, albeit at a lower growth rate than in the previous year. Some slowing of new home sales growth will occur due to the fact that a growing share of sales has come from homes that have not started construction. Nonetheless, buyer traffic will remain strong given favorable demographics, a shifting geography of housing demand to lower-density markets and historically low interest rates.
Tech Firms are Increasingly Entering the Tampa Bay Area
According to this recent article, about 1 in 5 commercial spaces in the City of St Petersburg are leased or owned by Tech Firms who have entered our real estate market in the last decade. Not only does this increase the number of high-paying jobs in the Tampa Bay Area, it also creates more demand for housing and continued growth in the commercial real estate market. As more tech companies allow their employees to permanently work from home, the Tampa Bay area of Florida will likely become even more popular as these employees relocated to our area in search of more affordable housing, beautiful beaches and no state income tax (aka an instant pay raise if you're coming from an income tax state).
If you've been thinking about selling a home in the Tampa Bay area, 2021 is the year to do it. With historically high housing demand and low interest rates, the housing market in our area is BETTER than it's ever been before for home sellers.
If you're thinking about purchasing a home in our area, now is the time to take advantage of low mortgage rates and invest in a piece of property that is sure to appreciate in value over time. If there's one thing we can recommend when it comes to building wealth over the long term, it's home ownership.
At The Sandy Hartmann Group, we'd love to help you reach all your real estate goals. Let's chat today to see how we can work together.
Andrea is the Managing Partner of The Sandy Hartmann Group. Andrea was born and raised in the Tampa Bay area and is a licensed Realtor with over 15 years of Marketing and Finance experience, holding ....
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