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Updated about 2 years ago,

User Stats

172
Posts
238
Votes
Stephen Dispensa
  • Real Estate Professional
  • Tampa, FL
238
Votes |
172
Posts

Where I See the Tampa Market Correcting

Stephen Dispensa
  • Real Estate Professional
  • Tampa, FL
Posted

So I noticed an aberration in the Tampa market, it started back in December and really gained steam this month. And it's in the availability of rentals. As of today, 1/17/2023 there are 1,172 rental units available on the MLS for Hillsborough County. 346 new rentals have come on the market since January 1st. To give you some perspective, want to know how many rentals came on the market for the same area in January of 2022? One.

That's right, last year for the entire month of January, ONE new rental cam on the market for all of Hillsborough County. This year, just 17 days in, we have 346 new rentals on the market. So what gives and what does it mean?

Well for starters, if you look at the history on many of these rentals, you'll see that these were properties that were recently put on the market for sale but didn't find buyers. You'll also often find that these properties were purchased within the last 12 months and have undergone significant renovation. It would appear that these were all flips and these sellers are now trying to find an out while they wait for rates to come down and the market to rebound. 

The problem is many of these investors bought too high, increasing rates cooled the market, and now they're stuck with these homes. Since January 1st, 281 properties have leased, however it doesn't look like the market is absorbing these rentals fast enough. So what is going to happen?

Well I think we'll be looking at a sell-off within the next 90 days. In areas like South Tampa some of these "flips" were purchased at 500k or more. Anyone who is stuck holding hard money at 12+ percent on loans that run from 300k to 700k is going to be hurting very quickly. If they can't get a lease in place, they're going to have to dump them, give up the property deed in lieu of foreclosure, or risk foreclosure itself. I think there's going to be some significant discounts in the single family space through this summer, however I don't think those deals are going to last forever. There is still plenty of money that's been sitting on the sideline. Plenty of buyers who were priced out in 2020 that have been waiting for an opportunity to buy.

The next few months are going to present key opportunities to add to your portfolio in the Tampa Bay area. Do you have a team in place to execute? 

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