The greater Tampa Bay area has consistently ranked as one of the top ten real estate markets over the past few years, making this rapidly expanding market a hot spot for commercial and residential real estate investors. This video will take a closer look at the local market while diving deep into several key metrics and neighborhoods to help you be a more informed investor in this area.
The city of Tampa originated as a cigar-centric city in the late 1800s and early 1900s. It evolved to become an important trade port and financial hub for the state of Florida. The region's idyllic winter weather, proximity to beautiful beaches, lively culture, and diverse economy, make it a popular place to call home. The greater Tampa Bay market encompasses three distinct cities, Tampa, St. Petersburg, and Clearwater, scattered across two counties, Hillsborough and Pinellas.
The median home prices climbed from $197,000 in June of 2016 to $271,000 today. The 14.3 percent home appreciation rate is slightly outpacing the five-year performance for the national average. The greater Tampa market has a 1.1 month housing supply, which is far below historical averages. Rent prices have increased 6.6 percent year-over-year, pushing the average rent price to $1,589. However, the rental vacancy in the area is 7.7 percent, 1.2 percent higher than the national average. Tampa Bay's overall mortgage delinquency rate is 7.7 percent, which is 1.2 percent higher than the national average. Foreclosures are still down, but high mortgage delinquencies could mean opportunities for investors in the distressed marketplace.
The Tampa market is supported by a variety of industries, partly because of its international airport and Port. St. Petersburg, Tampa, and Clearwater are home to several military bases, as well as several Raytheon, GE, and Lockheed facilities. It's estimated that Tampa's tourism brought in $6.9 billion in revenue in 2019. Many financial institutions and tech companies, including the cybersecurity sector use Tampa Bay as their hub for headquarters in the South. Tampa is home to several large company headquarters or manufacturing facilities including Johnson & Johnson, Pfizer, Honeywell, General Electric, Bausch & Lomb, and Suzuki. The healthcare industry is an essential industry for the Tampa market, providing 67,000 jobs in the St. Petersburg and Clearwater markets, while the city of Tampa is home to over 20 hospitals.
The neighborhoods of Temple Terrace and University Square capitalized on the need for student housing. With fairly low starting points for homes and rents in the $1,400 to $1,600 range, East Tampa offers worthwhile opportunities for investors. Disston Heights and St. Petersburg offers investors a chance to get into the market at a relatively low entry point. Gulfport is its own city bordering St. Petersburg on one side and the Gulf on the other. This eclectic and small city continues to hold reliable opportunities for investors.
The University of South Florida in Tampa is by far the largest university in the greater Tampa Bay area, with the main campus in North Tampa and a tertiary campus in St. Petersburg, the university serves more than 50,000 students. Gulfport is on Stetson law school a rather prestigious law school that serves around 4,000 students annually. Additionally, there are two smaller private colleges, including University of Tampa and Eckerd College that serve under 12,000 students combined.
As with other real estate markets, investing in the greater Tampa Bay area can be a potentially lucrative move. However, its unique geographical markup, particularly St. Petersburg and Clearwater, means land is in short supply. This will likely continue to drive real estate prices up as demand continues to flow in.