Are Tampa Houses Overpriced?

In 2022, local news was abuzz with reports that Tampa had one of the country's most overpriced real estate markets. In fact, Tampa is considered the 9th most overpriced city in the country when it comes to housing, according to Florida Atlantic University’s Beracha and Johnson Housing Index. So what does this mean for buyers and sellers in Hillsborough County?

Tampa is considered one of the best places to live in the country. Compared to other cities in Florida, housing remains affordable - and demand for real estate is still high. For these reasons, buying a home in the Tampa region is still a good choice for most people.

At Eaton Realty, staying on top of real estate trends is part of our job. We work with buyers and sellers alike to help them purchase or sell property in Hillsborough County, Florida. Reach out to a team member to learn more about our real estate services.

Want to learn even more about finding the right home at the right price? Contact us to speak with an experienced Tampa realtor.

Tampa’s Housing Market Remains Hot

The numbers don’t lie: real estate in Tampa is generally more expensive than in other regions. According to the Beracha and Johnson Housing Index, homes in Tampa are priced 41.30% higher than expected. This number puts Tampa among the top 10 most overpriced housing markets in the United States.

A closer look at these numbers reveals the premium for housing in Tampa has actually come down since its peak in 2020 (48.81% premium). Perhaps more importantly, demand for real estate in Florida - and more specifically in Tampa - has remained high. This is likely because Florida’s population continues to grow faster than the available housing supply. As a result, housing prices in cities like Tampa have not dropped as quickly as those not experiencing a population boom.

Of course, other factors come into play with the housing market - such as rising interest rates. Put simply, when it is more expensive to borrow money because of interest rate hikes, buyers are less likely to purchase a house, and fewer buyers lead to lower prices.

Even with higher housing prices, there are still many benefits to home ownership in Hillsborough County. The lower cost of living overall in Tampa, plus other factors like the state not imposing an income tax on individuals in Florida, are all advantages. Buying in a housing market that has seen steady increases over the past decade can also make for a smart investment. With major employers like the military (and MacDill Air Force Base) in the region, there is a strong likelihood that housing prices will remain stable or continue to grow in and around Tampa.

Does It Make Sense to Buy a House in Tampa?

When you see headlines about Tampa having one of the most overpriced housing markets in the country, it may lead you to conclude that buying a house in the region is a bad financial decision. However, it’s important to remember that this housing index primarily looks at the expected price versus the actual price for real estate. You should consider many more factors to determine whether buying a house is a good idea.

First, it is important to understand that while houses in Tampa may be “overpriced” compared to the expected price, they’re still far more affordable than homes in many other cities in Florida. Currently, homes in the area are selling for a median price of $375,000. By comparison, the median sale price of a house in Miami is $496,500.

Second, the data shows that the housing market remains strong in the region. Houses in Tampa typically sell for about 2% less than the asking price and spend a median of 74 days on the market before selling. While these numbers aren’t as favorable for sellers as just a few years ago, they demonstrate that demand for houses in and around Tampa remains stable.

Third, real estate in Tampa has appreciated over the past several years. This trend might have slowed slightly, but housing prices continue to rise. If you view your home as an investment, buying in the area may still be a smart bet.

Fourth, buying a house here makes sense if you live and work in Tampa. No matter what housing trends say, the reality is that people buy homes where they want to live - and lots of people want to live in Tampa. Even if you could potentially score a better deal in another part of the country if you need or want to live in Tampa, then the question is less “Should I buy a house in Tampa?” and more “How can I get the best house for my needs and budget in Tampa?”

This is where an experienced realtor comes into play. Your real estate agent isn’t just responsible for showing you the houses that you want to see. They perform a variety of tasks related to buying a home, including:

Helping you understand the type of home that you can afford based on current market conditions;

Referring you to a lender so that you can get pre-approved for a mortgage;

Informing you about programs that you can use to finance your home;

Finding listed homes that meet your needs and price range;

Explaining terms and factors that affect the price of a house, such as the number of days on market or being sold “as-is;”

Introducing you to new neighborhoods and areas of Tampa that you may not have known about, including up-and-coming neighborhoods that may have more affordable houses and a greater potential for growth;

Providing you with the inside scoop on schools and neighborhoods and other information, including issues like zoning and taxes that can affect the value of your home;

Giving you information about the value of the house based on a comparative market analysis;

Evaluating the house and neighborhood for you, including whether it is likely to appreciate based on their knowledge of the market and trends;

Advising you on how much to offer when you choose a house and what contingencies to include based on the property and a market analysis;

and Negotiating with the seller to help you get the best price, which includes advising you whether it makes sense to accept a counteroffer or negotiate further on price and terms.

At Eaton Realty, we have a deep knowledge of the Tampa Bay housing market, and we put our experience to work on behalf of our clients. If you want to purchase a home in Tampa, St. Petersburg, or elsewhere in Hillsborough County, we can help you find a property that fits your budget and meets your needs.

Finding An Affordable Home Near Tampa

Open to living outside of Tampa? You can stretch your dollar further by looking in cities near Tampa if you don’t have to be in Tampa. Our realtors service all of Hillsborough County, which includes cities like:

Apollo Beach

Brandon

Dover

Gibsonton

Lithia

Plant City

Riverview

Ruskin

Seffner

Temple Terrace

Thonotosassa

Valrico

Wimauma

We can help you explore these neighboring cities to help you find your dream home within your available budget.

Ready to Start Your Home Search?

Give Eaton Realty a Call. The decision to buy a house is a big one. It can often be complicated by stories in the news that tell you that housing is overpriced in Tampa - without taking into account other factors, such as the market's overall strength. A seasoned Hillsborough County real estate agent can work with you to help you decide if it makes sense to buy a house in or around Tampa - and help you find the home for sale that’s right for you. You can browse our listing directory on your own for homes in Tampa Bay under $400,000 to find more affordable homes for sale, but the process is much easier if you let our realtors put together a custom search for you. 

One of the most affordable ways to purchase a home would be to house hack. You can view duplexes and triplexes for sale in Tampa. Our Tampa property management team can always help you list and manage your rental to earn passive income that will help reduce the burden of monthly mortgage payments. 

From our state-of-the-art offices in Lithia, Eaton Realty helps clients throughout Hillsborough County become homeowners. We will explain current market conditions to you and work with you to decide if buying a house in Tampa makes sense, given the current prices. We know that this is one of the most significant purchases our clients will ever make, so we are dedicated to ensuring that each individual and family make the right choice for them.

If you’d like to learn more about the home-buying process in Tampa, fill out our online contact form or give us a call at 813-672-8022 to talk to a team member.