Manage episode 303455338 series 1248803
Demand is going through the roof for rentals in the Tampa Bay region, and so are the rents. According to one data firm, the hot housing market and a steady stream of new residents have pushed apartment rents up 22% since the beginning of this year.
Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.
Real estate data firm CoStar says that rents are moving higher because of an influx of new residents, and without enough rentals to meet that demand, there are no signs of a rent-growth slowdown. USF Financial Professor Lei Wedge explained the situation to local News Channel 8. (1) He listed four basic reasons that rents are moving higher so quickly. He says:
1 - There are lots of people moving to Tampa every day, and when people can’t afford to buy, they are “rushing into the rental market.”
2 - There are more renters in the market than the supply of rentals.
3 - Because “home values are going up like crazy,” investors are buying more expensive properties and charging higher rents for a certain rate of return.
4 - Long-time landlords are following suit, and raising their rents to match the higher rents offered by investors.
Tampa Bay Home Prices
About a month ago, Axios wrote about Tampa Bay’s hot real estate market. It says home values in this area are “rising faster than any other metro in the country” because inventory is too low to meet demand.
Tampa real estate agent, Justin Ricke, told Axios that some homes are getting as many as 30 offers, and that homes are selling almost as quickly as they are listed. He says: “You can put a house on the market Thursday, and if you market it correctly, get multiple offers by Sunday, have a decision by Monday.”
Axios says that closed and pending sales were down in July across a five-county Tampa Bay area, including Hillsborough, Manatee, Pinellas, Pasco, and Sarasota Counties. That’s according to MLS data. It says if the trend were to continue it could be a sign that the market is cooling off, but the article also points out that “slowdowns are typical for this time of year.”
Inventory is also a major factor. Because it is too low to meet demand, there would only be “so much cooling off of the market” as too many people go after too few homes.
Tampa Bay’s Median Home Price
So what’s the median price for the area? Data from Florida Realtors show the median for that five-county area is $373,000. That’s up from around $308,000 in July of last year. The months supply of homes in July was only about “one month” for each of those five counties. That represents a 65% drop in inventory for Manatee and Sarasota Counties, and a 30 to 40% drop for the others.
Stats show that homes went under contract in six days or less, on average, and that most single-family homes get the asking price or higher.
This climb in home prices and rents is also making it difficult for many people to afford a home or a rental. Ricke says he’s getting calls constantly from people looking for an affordable place to live.
If you are an investor, wondering how this could play out for you, RealWealth has its own data on the market. Recent posts on the Southwest Florida market include a podcast called: “Demographics & Hot Markets with Our Florida Expert.” That’s available under the Learn Tab at newsforinvestors.com.
You’ll also find a webinar replay on the Tampa area that you can access here as a RealWealth member through the Investor Portal. It’s free to join and will also give you access to experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and sample pro-formas for rental properties in markets across the U.S.
That’s it for this episode. Please remember to hit the subscribe button, and leave a review! Thanks for listening. I'm Kathy Fettke.