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US housing markets are slowing. Is Florida the exception?

Tampa was ranked the ninth-most-overpriced housing market in the country.

After two years of near-nonstop growth, housing prices may have finally peaked in some U.S. cities, according to data from Florida Atlantic University. Still, experts predict that Florida’s real estate market will remain strong compared to other parts of the country.

Each month, economists Ken H. Johnson from FAU and Eli Beracha from Florida International University compare the expected price of housing with the actual price in the country’s largest metro areas to see which cities are the most overvalued.

Tampa ranked ninth overall in July, with the average home selling for 58.5% more than the expected price. Fort Myers came in at No. 3 and Lakeland at No. 7.

Housing premiums — the difference between the actual and expected price — declined in 27 metro areas.

“This is a sign that places are reaching the top of the cycle and prices are going to start normalizing again now,” said Johnson.

Meanwhile, every city in Florida saw premiums increase slightly from June to July. In Tampa, premiums went up more than 1 percentage point.

Despite this, Lei Wedge, a professor of finance at the University of South Florida Muma College of Business, said she believes Tampa real estate prices have already peaked. She said statistical models like the one used in the FAU study often lag behind what is actually happening in the market.

The median sales price for homes in Tampa, St. Petersburg and Clearwater dropped from $169,000 in June to $164,450 in July, according to data from Greater Tampa Realtors. The number of active listings also increased from 391 homes to 494.

Tampa-based real estate broker Kendall Bonner said she’s seen how rising mortgage rates have helped cool the market over the past several months, making it less competitive.

“Buyers have gotten some of their agency back,” she said.

Despite this, Johnson said the large influx of buyers moving from out of state will prevent prices from dropping as far as they will in places with stagnant or shrinking populations.

According to data from the U.S. Census Bureau, Florida’s population grew by 14.6% from 2010 to 2020, but the number of housing units increased by just 9.7%

Though prices may seem out of reach for many Tampa Bay natives, Wedge said homes here are still going for less than in comparable cities like Atlanta or Dallas. There’s also no state income tax, which makes Florida an attractive option for remote workers looking to save money.

“Tampa is now on the map in terms of how the country sees us,” Bonner said. “We were once a lesser-known gem, now people are taking notice.”

Rather than holding out hope that prices will suddenly return to where they were pre-pandemic, Bonner urged first time homebuyers to explore alternative options like “rent-to-own” programs.

Read Article on TampaBay.com

Posted in:

  • Metro City Realty - Tampa,
  • Metro City Realty Blog

Post Tags:

  • Florida Housing,
  • Housing Market,
  • Housing Prices,
  • Metro City Realty,
  • Real Estate,
  • Tampa real estate
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