Tampa Bay’s housing market was one of the hottest topics of 2022, and experts predict that the trend will continue in 2023. According to Zillow, home prices in the Tampa area are expected to increase this year. This is despite the fact that other markets that saw huge increases during the pandemic are now slowing down.
The typical home value in the Tampa area is still up nearly 18% year over year, compared to 11% across the country. This can be attributed to several factors, including high population growth, rich buyers from other states, and geographic constraints that prevent the area from building enough to close the growing housing unit deficit.
Additionally, the housing market is still feeling the aftershock of Hurricane Ian, which destroyed some of the housing stock and delayed construction. This exacerbates the housing deficit and pushes prices up.
However, rising interest rates have been slowing demand. Higher interest rates mean that people can afford less of a mortgage, which may depress the number of people looking to buy or limit the houses they can afford. Abigail Hall Blanco, an economics professor at the University of Tampa, noted that rising interest rates and potentially fewer buyers may result in houses sitting longer, having fewer bids, and buyers having more leverage than they’ve had in the last two years.
Despite these challenges, there is some good news. Inflation appears to have slowed from its peak, meaning rents and eventually mortgage rates will start coming down. If that happens, affordability will stabilize. Zillow economist Orphe Divounguy added that the floor isn’t going to come from under us and Americans are not going to find ourselves squeezed.
In summary, experts predict that Tampa Bay’s housing market will remain strong in 2023, with home prices expected to increase. However, rising interest rates may result in houses sitting longer, and buyers may have more leverage than in the past two years. The good news is that inflation appears to be slowing, which could eventually result in lower mortgage rates and increased affordability.
