Quote from @Nazanin Boojar:
Quote from @Josh Green:
Quote from @Dan Maciejewski:
Quote from @Nazanin Boojar:
I just realized that the housing growth was insane in Florida this year. I feel wasted. If I invested in the market, I’d get a 38% return on my investment. 🤯 Is this for real?
Yes, it's been a few years of crazy appreciation in many markets in Florida. Most people think that the "crazy" numbers are done and that we should settle down to a manageable number. Depending on the market segment, at least in Pinellas, you can still see homes listing above what they "should" appraise for and selling 5-10% above that. Other segments are seeing things settle to almost balanced market conditions. Price reductions are back in those segments!
Gone are the days you could buy any shack and sell it 3 months later for an 8% profit, though. I would definitely not purchase thinking you could get a 38% ROI on appreciation alone!
As Dan mentioned, I would never recommend speculative short-term investing like buying a property and expecting a big return by just throwing it right back on the market no additions done to it. There's been a window where that was possible, but no one could have predicted what real estate was going to do the past couple years and still can't predict what will happen in the next couple years. Time in market > timing the market and true wealth in real estate is built through long-term strategies.
On a side note, I wouldn't be surprised if the Tampa area leads all metro FL cities and is in the top 10 over the next 10-15 years for average annual appreciation in the US based on the STILL affordable prices to amenities ratio and business/population growth outlook. This is just my opinion as I've experienced a top 3 metro the previous decade in appreciation in the country and I see the same/better outlook for the greater tampa area for the next decade.
Time in market > timing the market is a real thing. I mean I've seen people rushing for the best timing and left with no profit at the end.
I'm wondering what's your take on Tampa market. Based on what do you believe that the situation is going to stay the same or get better? And how do you define "better" here?!
I believe what @Josh Green is referring to here is the strong underlying macroeconomic conditions for both the state of Florida and the Tampa Bay market. There are 'levers' that raise and lower supply and demand for housing - where supply and demand meet determines the quantity of product demanded and the price buyers are willing to pay for the product.
Let us consider the Florida housing market, we can start first with supply.
Supply: One half of the equation for prices to rise is for supply to decrease, remain the same, or grow at a rate slower than the demand growth. I don't have the statistics in front of me, but from my experience, I would be quite surprised if Tampa was not a top 10 market nationwide for new construction of both residential and apartments. Undoubtedly supply is increasing. However, there is limited area to build and the majority of the time building requires tearing down existing inventory which means a lower net contribution to supply. Further, due to increased construction costs, non-dependable financing from skittish lenders, and overwhelmingly luxury new development, supply for housing faces a lot of friction that is likely to persist for the foreseeable future.
Demand: To put it more simply, housing demand can be stated as, "do people want to live here and why? Will that continue to be the case?" Therefore, factors such as job growth, desirable weather, things to do, low crime, and affordability have an important impact on demand. For most people, Florida weather is a huge plus, and for many, it's a more affordable market than other places they may consider living. Unless you're in Ybor or a select few rough neighborhoods, crime is not a concern here either. Further, job growth for high-income, salary work is among the strongest in the country in Tampa due to the available skilled and educated labor force here and the business-friendly nature of the state of Florida. However, Tampa led the nation in inflation and cost of living over the previous 12 months making Tampa much less affordable than it was a few years ago (try finding an apartment here where rent doesn't make you want to cry lol). Additionally, the cost and availability of capital through traditional sources is more expensive and harder to come buy making the supply for capital lower which can negatively impact the price of housing.
To summarize: Tampa is one of the most fundamentally sound markets in one of the most fundamentally sound states in the country for housing. There isn't any surprise as to why housing has appreciated rapidly here, however, changes in the market suggest that 'Wild West' type appreciation is gone. People selling junk as FSBO are seeing their properties sit on the market and realtors who have poured honey into the ears of the sellers are seeing their properties become stale. If you're looking to speculate, you'll have better luck in the stock market haha.
