Recent forecasts of an emerging U.S. housing bubble and its imminent burst are scaring many real estate investors in Tampa and elsewhere these days. What scares them most is the skyrocketing home prices which recall the 2005 peak levels that preceded the last housing bust and left plenty of property investors losing money.
In one industry estimate, the median sale price of a US single-family home has already risen by more than 40 percent since the last housing-market collapse that triggered the Great Recession.
For a smart property investor, however, it would be a mistake just to assume that the sharp home price uptick we’re seeing now outright means there’s a bubble about to burst as in 2005. The point here is that there are many other economic variables to weigh.
Safety Valves vs. Mortgage Failures
What has become constant though across the U.S. are the stricter lending requirements now imposed on home loan borrowers. With these safety valves in place, the subprime lending that triggered the last housing crisis is now effectively in check.
Hence, an avalanche of loan defaults similar to those that occurred onwards 2005 is now quite unlikely. More so now that there has been a significant increase in American wages and purchasing power since the last housing debacle.
What’s obvious too is that real estate markets aren’t the same everywhere. The economic factors at play, such as business growth and job creation, could vary significantly from market to market.
Price as an Upside
Taking its economic environment into account, the real estate market of the Tampa metro area should come out a winner even for those investors wary of the escalating home prices. The price levels and rate of increases in this metro covering the cities of Tampa, St. Petersburg, and Clearwater emerged as the most moderate in 2018 (see table below) among the five most populous metropolitan statistical areas (MSA) of Florida.
2018 Price Comparisons: Statewide & Top Metros in Population