Will The Tampa Housing Market Crash?

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During the great housing bubble and crash of the late-2000s, much of the Sunshine Star State experienced the worst effects. Florida was one of the states most impacted by the real estate bubble. And its subsequent crash left Florida housing markets picking up the pieces for years.

Nearly two decades later, the pandemic helped induce notable increases in home construction, and homebuying activity in 2021 and 2022. However, beginning with the series of rate hikes beginning in 2022, housing market activity has been dealt a major headwind. Now, a common question on people’s minds is: Will the Tampa housing market crash?

Read on to find out key trends developing in the Tampa housing market in 2023 and how likely a housing market crash could be.

Tampa Housing Market 2023: Overview

After analyzing housing data sourced from Redfin
RDFN
 the Tampa metro area housing market is showing signs of a coming down to earth in home prices. The median sale price for the Tampa metro area overall only rise by 0.9%, from $376,700 in August 2022 to $379,990 in August 2023. That’s quite different than the annual growth from August 2021 to August 2022, when the median sale price rose by 19.6%, from $315,000 to $376,700.

For the city of Tampa proper, however, its housing market has continued to be hot. The median sale price in Tampa rose by 19.7%, from $380,000 in August 2022 to $455,000 in August 2023. Out of the 34 cities in the greater Tampa Bay area, the city of Tampa’s year-over-year increase in median sale price is the third highest growth rate in the study. It is exceeded by only Carrollwood, where home prices rose by 48.1%, and Keystone, where home prices rose by 30%. Tampa’s current median sale price is way above prices during the pre-pandemic era. In August 2018, the median sale price in Tampa was only $222,250.

That said, nearly half of 34 cities we analyzed experienced declines in their median sale price year-over-year:

The cities in the greater Tampa housing market that experienced year-over-year declines in home prices form an interesting geographic mix. Several cities are located right in the middle of the Pinellas Peninsula, the peninsula that’s home to St. Petersburg and Clearwater. Most of the other cities are those that are west and south of the city of Tampa. The city that experienced the biggest year-over-year decline in home prices is Lealman, which is in the central part of the Pinellas Peninsula, next door to St. Petersburg: The median sale price fell by 27%, from $338,500 in August 2022, down to $247,000 in August 2023. Gulfport, which witnessed the second largest drop in prices, is in the south of the Pinellas Peninsula: Its median sale price fell by 22%, from $472,500 in August 2022, down to $368,50 in August 2023.

Of the 34 cities in the Tampa metro area we analyzed, seven housing markets experienced double-digit annual growth rates in their home prices. Two of these are pillars of the Tampa metro area — the Tampa housing market and the St. Petersburg housing market. They saw their median sale prices rise by 19.7% and 14.3%, respectively. The other five housing markets are mainly cities near the city of Tampa proper, primarily north of it. Prime examples are Carrollwood — 48.1% year-over-year home price growth — and Keystone — 30% year-over-year home price growth.

Inventory in the Tampa Housing Market Is Running Low in Most Cities

The majority of cities in the greater Tampa housing market have experienced declines in available inventory year-over-year. Not coincidentally, many of the cities that witnessed decreases in home prices also saw their inventory build up. For example, in Gulfport, the median sale price fell by 22%, while its available inventory grew by a remarkable 71.4%: From 56 homes for sale in August 2022 to 96 homes for sale in August 2023.

On the other hand, suburbs that are very close to the city of Tampa experienced significant declines. For example, in Keystone, the median sale price grew by 30%, while its housing inventory fell by 40.5%: From 84 homes for sale in August 2022, down to 50 homes for sale in August 2023.

For the Tampa metro area overall, available inventory fell by 10.3%, from 11,727 homes for sale in August 2022 to 10,519 homes for sale in August 2023. In the city of Tampa proper, the decline was even steeper. From 1,683 available homes for sale in August 2022, the Tampa housing market saw its inventory drop by 22.2%, down to 1,310 homes for sale in August 2023.

Houses for Sale in the Tampa Housing Market Are Staying on the Market Longer than Last Year

Another very useful metric for analyzing housing market activity is the length of time a home for sale spends on the market before getting bought up. Redfin refers to this measure as days on market, which represents the monthly median days on market a home for sale sits before being taken off the market. In the Tampa metro area, the median number of days on market of a home for sale rose from 16 days in August 2022 to 23 days in August 2023, equal to an annual increase of roughly 43.8%. However, in the city of Tampa proper, the year-over-year increase in the median days on market was smaller — 11.1% — rising from 18 days on market in August 2022 to 20 days on market in August 2023.

Below is a table detailing the trends in days on market in the 35 areas we analyzed in the greater Tampa housing market:

The Bottom Line on a Tampa Housing Market Crash

On the question of whether the Tampa housing market will crash, the data makes this event very unlikely. As with so many housing markets across the country, the Tampa housing market has experienced moderation in housing market activity, however, an outright crash doesn’t appear to be reflected in the data. If the Tampa housing market were in the midst of a housing bubble and homes weren’t selling, typically listed homes for sale would have their prices slashed. The very opposite has occurred in the Tampa housing market. Out of the 34 cities we analyzed 30 of them saw the percentage of active listings with price drops decline year-over-year. For the Tampa metro area overall, the percentage of active listings with price drops fell by more than a fifth (20.9%): From 49.7% in August 2022, down to 39.3% of active listings in August 2022.

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