The Doom Sayers vs. The Silver Lining - A Look at the Tampa Real Estate Market

Tampa Real Estate

Are we wearing rose colored glasses when we say that this is a good time to buy a home in Florida?

As Florida housing prices started to fall in late 2005, many economic analysts who had been predicting a market “crash” prepared their “I told you so” speeches. Among the most often heard lines – besides the “I told you so”, that is – is how the Realtor community contributed to the unrealistic inflation in housing prices with their overly rosy view of the market. They accused us of misrepresentation when we encouraged people to buy as prices rose. Now they’re accusing us of misrepresentation when we encourage people to buy in a buyers’ market. If you follow their line of reasoning, it will never be a good time to buy.

So are we being overly optimistic or opportunistic? I don’t think so, and here’s why.

From 2000 to 2005, real estate prices soared on the wings of speculator investing. Developers bought land and investors, many of them foreign investors seeking tax shelters for their own money, drove prices in a tight upward spiral. Those were good years if you were in the real estate market for profit, and those who bought during those years have seen their property appreciate considerably. Homeowners who bought during the so-called “boom years” now own a home that is worth more than they paid for it, along with all the other benefits of owning a home in Florida. Speculators who bought with the intent of making a quick profit and getting out are now looking for a way out.

Now that prices have stabilized and sales have slowed, the other benefits of buying a home in Florida are taking center stage. Here’s a few of the reasons why buying a home in the Tampa Bay area now is a great idea.

Job Prospects

The unemployment rate in Florida is 1.3% below the national average. It’s easy to find a job in Florida. The Tampa Bay area unemployment rate is even lower, thanks to initiatives that have encouraged high tech and international companies to locate here. Business diversity has increased here in the past five years, thanks to a concentrated effort by the powers that be to move the focus of the economy away from tourism.

From 2005 to 2007, while housing sales and starts were beginning to stall, Florida gained over 250,000 jobs – and nearly half of those jobs were in the high tech or medical industries. These aren’t temporary or low-wage jobs. They’re the type of jobs that draw people. Major international players like Coca Cola have decided to locate major parts of their offices here because of the increased opportunities for recruitment – we have the growing population to support big business and big business is happy to make sure that there are jobs here to support the population growth.

I’m not the only one with a rosy view of the Florida economy. In February, when Forbes published its annual list of top 25 Best Cities to Work, there were six Florida cities in the list. Moody’s web site, Economy.com ranked Tampa #15 on their Business Vitality Index.

Cost of Living

The cost of living index in most major cities in Florida is well below the cost of living index in major cities in other parts of the country. The cost of living index is determined by comparing the cost of living in a particular city with the national average cost of living. The national average is 100. In Boston, the cost of living index is 240. In New York City, it’s 364. In San Francisco, it’s 217. In Miami, the cost of living index is 104. In Tampa Bay – it’s only 96. Other Florida cities are comparable. It costs half as much to live in Tampa as it does in Boston.

School System

For families who have or plan to have children, the quality of the school system is a major factor in choosing where to live. Florida’s A+ Plan for Education is a model for school quality and improvement nationwide. It provides parents with many options in choosing the right school for their child, and allows them a voice in their children’s education.

Housing and Real Estate

One of the effects of the boom in housing between 2000 and 2005 is that there are a lot of options for anyone who wants to buy in Florida. From condo developments to single family homes, to planned communities, Florida has a wealth of new and existing homes for sale. While the doomsayers point at the dropping rate of new home permits, they somehow miss the point that a lot of homes on the market means a lot of choice for those who are in the market. And while they’re selling slower than they did two years ago, the state also has one of the largest rates of population growth in the country.

Add It All Up

Take the expectations raised by the five years of spiraling prices out of the equation and look at where we are. Florida has:

- a solid stock of real estate with many housing options in many price ranges

- motivated sellers

- an influx of new population that is nearly twice the national average

- a solid base of jobs that is steadily growing

- one of the lowest unemployment rates in the company

- a healthy and growing economy

- a school system committed to providing an excellent education

- a government committed to supporting growth with initiatives and tax reform

- the beautiful weather, the beaches and all the reasons that have drawn people to Florida for years

In short, Florida has all the earmarks of a place that people want to live. It’s a buyers’ market in Florida real estate at the moment. To sweeten the pot, the beginning of summer has seen three consecutive weeks of dropping interest rates.

There are reasons that we persist in seeing silver linings on clouds and taking the rosy view of bad news. It’s because the silver linings are real. The Florida real estate market is far from dead. On the contrary, it’s going through expected growing pains as it adjusts to becoming a mature, healthy and growing market for people who want to call it home.

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Date: Wednesday, July, 11th 2007 @ 09:04:11 AM
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