The Tampa Florida real estate market in 2022 seems to be on its way to replicating its impressive performance in 2021. According to the latest housing market news, real estate investors are purchasing homes in Tampa FL at a record rate. The 2022 US housing market is expected to stay hot overall, with many real estate trends that brought the market boost staying in place.
Table of Contents
- How Is the Real Estate Market in Tampa Florida?
- Top 5 Neighborhoods in Tampa FL for Traditional Rentals
- Top 5 Neighborhoods in Tampa FL for Airbnb Rentals
- Conclusion
Between July and September 2021, 1 in 4 estates got sold to a real estate investor, according to reports. Tampa Bay ranks as the 7th hottest metro area in the US for property estate investors, with its share of investment purchases averaging 18%.
The rising prices of homes in Tampa are pushing potential buyers into the market. Realtors expect Tampa Florida real estate market to see a 6.8% rise in prices and a 9.6% increase in home sales, all because of good quality of life, low cost of living, and increased job opportunities.
How Is the Real Estate Market in Tampa Florida?
Tampa is located in western Florida, near the Gulf of Mexico and along Tampa Bay. It’s a great place to live and conduct business. The entire Tampa Bay Area is seeing a steady job growth created by business and higher-paying professional services. The population is also on the rise, which is why Tampa is leaving most US cities behind. The result? A rapidly rising housing demand in Tampa, especially in Hillsborough County, where the city of Tampa resides.
As the city continues to attract more residents and see new companies open, the impact of living comes at a cost – from the increasing infrastructure and cost of housing to utilities and landlord insurance in Florida in general and Tampa in specific. Still, several factors make Tampa the best place to buy rental property.
As for the national real estate market stability, it is definitely affected by the low interest rates during the pandemic. However, rising mortgage rates tell us that the next housing crash prediction won’t come to fruition in 2022.
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Related: Florida Real Estate Market 2022 Outlook
Cost of Living
The low cost of living in Tampa is what draws the attention of US citizens, and many of them are interested in moving there due to the post-pandemic increase in remote work flexibility. If you cannot afford to live in Miami, Tampa is a great alternative. The cost of living there is equal to the national average, while the current housing costs are about 4% lower than the national average.
The median property prices top at $866,042, with the monthly traditional rental income of $2,462 and Airbnb income of $2,596. There are good predictions coming from real estate experts, saying that Tampa will continue to add entry-level properties over the next few years. In other words, if you’re looking to buy an investment property in Tampa, now might be the right time.
What can make housing more expensive in the area are expenses like hurricane and flood insurance, but in general, the area is quite an affordable place. On the other hand, Florida doesn’t impose state income taxes, which attracts business owners and workers who want to keep more of their money in their own pockets.
Population Growth
In terms of population, the metro region of Tampa Bay (which includes Tampa, Clearwater, and St. Petersburg) grew more than 14% during the last decade. The entire region is growing faster than South Florida, and there are no signs of slowing down. For comparison, the Miami region expanded by 10%.
According to the US Census Bureau, Tampa’s population increased by more than 230,000 over the last decade. To put things into perspective, the population went up by more than 6% over the last five years, seeing more than 40,000 new residents during the pandemic alone.
Job Market
The Tampa region continues to welcome new job candidates due to more people coming to the region and wanting to enter the workforce. Also, more individuals are deciding to leave corporate life to launch their own ventures and become entrepreneurs. Many people with great talents and skills are now opting to make their own hours and work for themselves.
The economy in Tampa is founded on a diverse economic base, including tourism, construction, technology, and finance. The Port of Tampa is the largest port in Florida, and the Tampa Florida real estate market continues to stay strong. Various publications rank the area as one of the best places to be in the US when it comes to job opportunities.
As of September 2021, the area gained the most private-sector job openings of all US metro areas. Since the beginning of 2021, the Tampa area’s added 84,600 new jobs. The post-pandemic economy stays on the path to recovery, and key employment sectors (e.g., professional and business services, construction, hospitality, leisure, and finance) are showing positive job growth.
High Demand for Housing
Excellent living conditions are one of the factors contributing to an increased demand for housing in Tampa, with young professionals and retirees entering the market, looking for their new homes. The demand in the Tampa Florida real estate market continues to exceed the supply, which makes the market increasingly competitive. Right now, Tampa is a strong seller’s market with higher housing prices and a shortage of homes.
On the other hand, the mortgage interest rates are low, which incentivizes the sellers to jump into the Tampa Florida real estate market and sell their properties. To combat inflation, mortgage rates are likely to jump, which should help stabilize house prices and cool down the hot Tampa Florida real estate market (but not immediately).
Attractive Renters’ Market
According to ABCActionNews, the monthly rental prices surged 24.8% between July and September, while the rest of the US saw an 11% increase. Residents of Tampa Bay are seeing the highest rent increases in the country.
Since the rising home prices are preventing some real estate buyers from entering the market, rising rental costs are driving homeowners to rent out their traditional or Airbnb properties. Some people may not be able to afford a house, but they cannot live without a roof over their heads.
The traditional rental income in Tampa currently tops at $2,462, with a cash on cash return of 2.45% and a cap rate of 2.52%. Low cash on cash return rate means it may take longer to see the return of cash invested, but it can be improved with a good marketing strategy and Florida investment property location. As for the Airbnb numbers, the monthly Airbnb rental income is $2,596, with a 2.73% cash on cash return, 2.8% cap rate, and an occupancy rate of 53%. The Tampa Florida real estate market is definitely getting more attention from property investors.
Metrics such as cap rate and cash on cash return are essential for real estate investors. They are used to estimate and compare your rates of return on investment properties and cash income earned on the cash invested in them. Mashvisor provides the data and tools for calculating these metrics and locating the best place to buy rental property in a matter of minutes.
Top 5 Neighborhoods in Tampa FL for Traditional Rentals
Are you ready to invest and start seeing a generous return on investment from your traditional rental property? As rental property investments continue to attract buyers, all eyes are on the Tampa Florida real estate market. Expect rental rates to continue to go up. If you’re an out-of-date investor or a beginner in the business, how do you determine which Tampa neighborhood is the right one to buy a Florida investment property?
According to Mashvisor’s March data, the following are the top 5 neighborhoods for traditional rentals in Tampa based on the highest to lowest traditional cash on cash return.
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1. West Riverfront
- Number of Traditional Listings: 23
- Monthly Traditional Rental Income: $2,650
- Traditional Cash on Cash Return: 7.79%
- Traditional Cap Rate: 8.01%
- Price to Rent Ratio: 9
- Number of Listings for Sale: 1
- Median Property Price: $279,000
- Average Price per Square Foot: $234
- Days on Market: 9
- Walk Score: 61
2. Old West Tampa
- Number of Traditional Listings: 14
- Monthly Traditional Rental Income: $2,162
- Traditional Cash on Cash Return: 5.30%
- Traditional Cap Rate: 5.43%
- Price to Rent Ratio: 13
- Number of Listings for Sale: 2
- Median Property Price: $324,500
- Average Price per Square Foot: $297
- Days on Market: 18
- Walk Score: 47
3. Northeast MacFarlane
- Number of Traditional Listings: 19
- Monthly Traditional Rental Income: $2,314
- Traditional Cash on Cash Return: 3.55%
- Traditional Cap Rate: 3.63%
- Price to Rent Ratio: 17
- Number of Listings for Sale: 10
- Median Property Price: $458,670
- Average Price per Square Foot: $269
- Days on Market: 14
- Walk Score: 82
4. Old Seminole Heights
- Number of Traditional Listings: 20
- Monthly Traditional Rental Income: $1,718
- Traditional Cash on Cash Return: 3.21%
- Traditional Cap Rate: 3.29%
- Price to Rent Ratio: 18
- Number of Listings for Sale: 6
- Median Property Price: $380,233
- Average Price per Square Foot: $313
- Days on Market: 15
- Walk Score: 46
5. Bon Air North
- Number of Traditional Listings: 26
- Monthly Traditional Rental Income: $2,550
- Traditional Cash on Cash Return: 3.17%
- Traditional Cap Rate: 3.23%
- Price to Rent Ratio: 19
- Number of Listings for Sale: 11
- Median Property Price: $571,582
- Average Price per Square Foot: $343
- Days on Market: 27
- Walk Score: 59
Related: The 40 Most Profitable Locations for Traditional Rentals: Cash on Cash Return
Mashvisor, through its Real Estate Heatmap, can help investors find the top-performing neighborhoods for traditional rentals.
Top 5 Neighborhoods in Tampa FL for Airbnb Rentals
If you want to buy a vacation rental in Tampa FL and start a rental property business, you are required to obtain a license from the Florida Department of Business and Professional Regulation. According to state laws, a vacation rental is any unit/group of units in a condominium or cooperative or any collectively or individually owned dwelling unit.
The Tampa Florida real estate market, as well as the greater Tampa Bay area, is still at the top markets for owning an Airbnb rental property. Here is the rental data on the top 5 neighborhoods for Airbnb rentals in Tampa, ranked from the highest to the lowest Airbnb cash on cash return, according to Mashvisor’s March data.
1. West Riverfront
- Number of Airbnb Listings: 214
- Monthly Airbnb Rental Income: $2,850
- Airbnb Cash on Cash Return: 6.04%
- Airbnb Cap Rate: 6.22%
- Airbnb Daily Rate: $139
- Airbnb Occupancy Rate: 63
- Number of Listings for Sale: 1
- Median Property Price: $279,000
- Average Price per Square Foot: $234
- Days on Market: 9
- Walk Score: 61
2. Old West Tampa
- Number of Airbnb Listings: 206
- Monthly Airbnb Rental Income: $2,677
- Airbnb Cash on Cash Return: 4.90%
- Airbnb Cap Rate: 5.02%
- Airbnb Daily Rate: $133
- Airbnb Occupancy Rate: 60
- Number of Listings for Sale: 2
- Median Property Price: $324,500
- Average Price per Square Foot: $297
- Days on Market: 18
- Walk Score: 47
3. Ybor City
- Number of Airbnb Listings: 198
- Monthly Airbnb Rental Income: $2,897
- Airbnb Cash on Cash Return: 4.62%
- Airbnb Cap Rate: 4.74%
- Airbnb Daily Rate: $136
- Airbnb Occupancy Rate: 62
- Number of Listings for Sale: 9
- Median Property Price: $392,767
- Average Price per Square Foot: $250
- Days on Market: 36
- Walk Score: 59
4. Northeast MacFarlane
- Number of Airbnb Listings: 198
- Monthly Airbnb Rental Income: $2,887%
- Airbnb Cash on Cash Return: 3.61%
- Airbnb Cap Rate: 3.69%
- Airbnb Daily Rate: $133
- Airbnb Occupancy Rate: 60
- Number of Listings for Sale: 10
- Median Property Price: $458,670
- Average Price per Square Foot: $269
- Days on Market: 14
- Walk Score: 82
5. Wellswood
- Number of Airbnb Listings: 196
- Monthly Airbnb Rental Income: $2,660
- Airbnb Cash on Cash Return: 3.03%
- Airbnb Cap Rate: 3.09%
- Airbnb Daily Rate: $118
- Airbnb Occupancy Rate: 63
- Number of Listings for Sale: 2
- Median Property Price: $430,000
- Average Price per Square Foot: $318
- Days on Market: 6
- Walk Score: 39
Conclusion
The housing market predictions for the next 5 years tell us that the Tampa Florida real estate market is going to get even hotter. Therefore, if you’re thinking about getting into the market, now is probably the best time to do it. It is a lucrative investment for both long-term and short-term rental owners. They can rely on Mashvisor’s comprehensive data and AI-based tools for creating a sound real estate strategy.
The best investment strategy in the right location will increase your chances to succeed in the Tampa Florida real estate market. Do your due diligence, equip yourself with patience, and approach your new venture with a vision. With the right tools, such as a property finder, heatmap, and rental property calculator, you’ll be able to guide your business properly and start building wealth in real estate.
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