Tampa Bay one of most-impacted housing markets from pandemic, analysis finds

It could take about a decade to save for a downpayment in the current market.
Aerial photo of Downtown Tampa overlooking the Tampa Riverwalk and Hillsborough River is pictured on Wednesday, April 13, 2022 in Tampa.
Aerial photo of Downtown Tampa overlooking the Tampa Riverwalk and Hillsborough River is pictured on Wednesday, April 13, 2022 in Tampa. [ LUIS SANTANA | Times ]
Published June 15, 2022

Pinellas Park resident Michael Kelly said he was ready to buy a condo in August 2020, but that goal began to slip away as he searched for one.

Kelly, a ceramic coating installer, said he was close to buying a few properties only to watch them be pulled off the market and relisted months later for nearly $70,000 more. Condominium association fees also went up, which made it harder for him to secure a mortgage.

“My realtor, more than halfway through 2021, she just said there’s no point to even look at the listings. It’s just going to completely defeat me,” Kelly said. He recalled her saying, “there’s really nothing else we can do.”

The pandemic has made it increasingly difficult for homebuyers to get in on the hot market — especially in Tampa Bay.

Austin, Las Vegas and Tampa Bay were the most-impacted housing markets in the U.S. by the COVID-19 pandemic, with an influx of people moving in driving up costs, an analysis by Nerdwallet found. The high demand and low housing inventory caused dramatic changes in home prices in these three cities. The average number of houses available each month in the Tampa Bay market dropped 75% while prices soared 28% over the course of the pandemic.

“While it’s great for current homeowners, it definitely makes things harder for first-time buyers,” said NerdWallet data analyst Elizabeth Renter.

Tampa Bay homes during the first quarter of 2022 sold for 6.4 times the average income of a first-time homebuyer, who are typically between 25 and 44 years of age, the NerdWallet data found. Compared to the last normal quarter before lockdowns took full effect — the first three months of 2020 — it was 4.4 times the amount.

A house should cost about 3 times an owner’s income to be considered affordable, Renter said. There’s few places left in the U.S. with prices in that range for most people. While Tampa Bay is still relatively cheaper than cities in California, like Los Angeles, San Diego, San Jose and Sacramento, Renter said, one Florida city joined the list of the five-most expensive cities in the nation for the first time — Miami.

Tampa Bay has the fastest rising home prices in the U.S., according to the S&P CoreLogic Case-Shiller Index, and Renter said many first-time buyers don’t have the flexibility to compete since they typically have smaller credit histories and are early in their careers.

For Kelly in Pinellas Park, rising rents have also hurt his pursuit to find a home. He said he had to sign a lease $600 more a month than what he previously paid when he couldn’t find a condo to buy.

“The most upsetting thing is that was one of the biggest reasons I moved down here [five years ago] was for what Florida all had to offer before this, like saving on taxes and everything else,” Kelly said. “It was supposed to be a lot easier, a lot more affordable and a lot less stressful.”

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Before the pandemic, the average home buyer in the Tampa Bay area would need about eight years to save enough money for a 20% down payment, according to data from mortgage company Tomo. Now it could take about a decade.

The years it takes to save likely passed a record set during the 2000s housing bubble (10.2%), according to Tomo. It’s a troubling sign for the housing market as the growing gap between income and housing is one metric economists use to detect if there’s a bubble forming.

Related: Is Tampa Bay's housing market reaching its peak?

Researchers at the Federal Reserve Bank of Dallas warned in March there may be a housing bubble brewing in the U.S. based on metrics that compare rents and income relative to housing prices. But not all experts agree.

About 60% believe there is no housing bubble, according to a Zillow survey of 100 economists and housing experts released June 9. About 32% do believe there’s a bubble, citing rapid unaffordability nationwide and relatively cheaper mortgage rates, and 8% said they weren’t sure.

A large portion of experts who said they don’t think there’s a bubble in the housing market were against using the term since it implies a crash, which they don’t expect to happen soon.

Renter said she doesn’t expect prices to fall either, but rather they’re likely to cool from the fast growth as mortgage rates rise.

”Listings may go up this time of year and we may see prices slow, but there’s still fierce competition,” she said. “First-time buyers should steady themselves for the road ahead.”

St. Petersburg resident and hospitality worker Kimberly Stidham said she doesn’t have the resources to compete against the influx of cash buyers who are paying several thousand dollars over the asking price and waiving contingencies on the homes in her price range. The only other option are houses that need major renovations, she said.

Several lenders told her that if it was any other time, she could get a home easily, Stindham said. With her good credit score, $20,000 saved for a down payment, no student loans or credit card debt, she was approved for a mortgage in January.

“I qualified for $250,000 ... but 250K doesn’t go very far anymore,” Stidham said.

Now, the 33 year old said she’s considering leaving the state.

“I’ve been told I’m almost a perfect candidate ... But I’m still having a hard time.” Stidham said. “You finally get there and the goal posts have moved.”