The US property market experienced a busy year in 2020 with continual increases in house prices and a rising shortage of supply. Since new trends are firmly in place, predictions for 2021 point to more of the same. And within this scenario, certain locations can expect to see a surge in interest. Florida metros feature among them and analysts highlight this year as the time to invest in Tampa real estate.
New trends favour lifestyle and climate
The pandemic and lockdown restrictions have fundamentally changed the way people live and want to live. One of the biggest trends to emerge in 2020 was a more flexible approach to working. As a result, home offices are the top of must-have lists for new homes.
This flexibility means that buyers can now shift their priorities away from a location near their workplace to a market that suits their lifestyle. Housing affordability now shares centre stage with pleasant lifestyle and warm climate.
Florida ticks boxes
Within this scenario, Florida comes into its own. A perennial favourite among relocators, the Sunshine State has become even more popular since the arrival of the pandemic.
A recent study by Updater rated the top 20 relocation markets in the US. The report tracked 1.5 million moves across the country between January and November last year.
The 20 most popular destinations to move to are all warm weather cities. And a quarter are in Florida. Tallahassee stood in third place with West Palm Beach in 11th, Tampa in 15th, Orlando in 16th and Fort Myers in 20th.
Major market in Tampa real estate
The Tampa metro area is expected to see big interest from relocators in 2021. Redfin included the city among its hottest markets this year. The real estate portal predicted that Tampa “will experience an increase in population and demand for homes”. As a result, the property market will see huge demand.
Redfin pointed out the shift in location from traditionally more affordable southern cities in favour of smaller metros. “For years, Americans have been leaving expensive coastal cities for Austin, Phoenix and Miami,” said the report.
However, it emphasizes that these have become “unaffordable for both current residents and new potential migrants”. The shift to smaller metros means homebuyers can make considerable savings. For example, Tampa real estate costs 24% less than Miami and San Antonio property 27% less than Austin.
Suburban homes more popular
Another trend favouring smaller metros like Tampa comes in the new preference for living in the suburbs. Buyers now prioritise larger homes with private outdoor space, generally found outside city centres.
Demand for single-family homes surged in the US throughout 2020 as this type of property became the most sought-after. Forecasts for 2021 predict that this trend is here to stay resulting in yet more pressure on the already tight market.
Demand in Tampa skyrockets
As well as being one of the hottest markets in the US, Tampa real estate will experience strong demand for single-family homes. Median prices rose by 15.7% in the year to November 2020 (latest figures available) to reach US$295,000.
But the biggest indication of the strength of demand comes in figures for the time taken to contract. While in November 2019, it took an average of 31 days for a single-family home in Tampa to go to contract, in November last year it was a mere 9 days. As a result of this burgeoning demand, supply currently stands at just 1.2 months.
Tampa therefore makes a compelling choice for investors over the next 12 months. Find out how to invest in Tampa real estate in 2021.
(Source: Market Watch, Updater, Redfin)