Tampa Bay Housing Market Faces Challenges Amid Hurricane Aftermath
Tampa Bay Housing Market Faces Uncertainty After Hurricane Season
TAMPA BAY, FL – After a year marked by slowing home sales, the Tampa Bay housing market is bracing for further declines in the coming months, as the region grapples with the aftermath of back-to-back hurricanes, experts warn.
Once a beacon of real estate growth, the Tampa Bay market has seen a significant shift. Daryl Fairweather, chief economist at Redfin, noted that while the area remained relatively strong compared to national trends, soaring prices have curtailed the explosive growth that characterized the market during the COVID-19 pandemic. The median price for a single-family home in the Tampa-St. Petersburg-Clearwater metro area fell by 1.4% year-over-year, according to September data from Greater Tampa Realtors. However, over the past five years, prices have skyrocketed nearly 65%, climbing from $248,000 to $408,990.
The decline in home sales is stark, with a 17% drop year-over-year and a staggering 33% decrease over the past five years. Fairweather attributes this downturn to rising costs associated with insurance and property taxes, making Florida less appealing to out-of-state buyers. The recent hurricanes, Helene and Milton, have only added to the uncertainty, potentially deterring prospective buyers from states like New York and California.
One of the most pressing challenges facing the market is a severe lack of available homes. As of September, the Tampa Bay area had only a four-month supply of homes, well below the six-month benchmark that indicates a balanced market. The hurricanes have exacerbated this inventory shortage, leaving many homes uninhabitable. Craig Beggins, president and CEO of Century 21 Beggins Enterprises, emphasized that the storm damage has worsened the already tight housing supply.
Sellers are also hesitant to list their homes, fearing they may struggle to find new properties to move into. Local real estate investor Josh Streeter, who had planned to sell two rental homes in St. Petersburg, is now reconsidering. Although his properties were not damaged, the looming costs of flood insurance have made him wary of the market’s future.
The impact of the hurricanes is already evident in the listings for storm-damaged homes, many of which are being sold "as is" or for land value. One notable case is a four-bedroom home in St. Petersburg’s Shore Acres neighborhood, which was initially listed for $535,000 before the storms but has since re-entered the market at $385,000.
As the market adjusts, some homeowners are exploring off-market short sales, a trend reminiscent of the 2008 housing crisis. However, Beggins cautioned that many distressed sellers may fall prey to unscrupulous investors making low-ball offers.
Despite the current turmoil, Jennifer Zales, a luxury waterfront property specialist with Coldwell Banker, believes that the storm season will not trigger a mass exodus from coastal neighborhoods. Instead, she anticipates a shift toward newer, elevated homes, with buyers willing to pay a premium for peace of mind.
Historically, the housing market has shown resilience in the wake of natural disasters. Fairweather pointed out that home prices often rebound as cities begin the rebuilding process. In fact, a recent analysis of property data from Lee County, which was hit hard by Hurricane Ian in 2022, revealed that homes in areas with the most flood insurance claims sold for 9% more than those in less affected regions within a year.
For homeowners contemplating a sale, Beggins advises patience. Many may need to wait for clarity from their insurance companies before making decisions. Additionally, some homeowners could qualify for mortgage forbearance, providing temporary relief from payments as they navigate the recovery process.
As Tampa Bay faces the dual challenges of a shifting housing market and the aftermath of hurricanes, the coming months will be crucial in determining the region’s real estate trajectory.