How will Tampa Bay home prices, sales fare in 2018?

Published November 29 2017
Updated November 29 2017

With data on millions of homes nationwide, the folks at think they have a pretty good idea of how the real estate market is doing.

So hereís their prediction for the Tampa Bay area in 2018:

Sales, up 1.3 percent.

Prices, up 6 percent.

Thatís not as good as in 2016 or even in the first part of this year. But itís certainly not bad.

"Tampa Bay is not expected to have incredibly brisk sales growth but 1.3 percent is a pretty healthy market from the sales side," Danielle Hale, realtor.comís chief economist, said in a phone interview Tuesday from New York. "Price growth is slower than youíve probably seen in the last year but itís still faster than normal."

Among the nationís top 100 housing markets for 2018, Tampa Bay ranks 29th ó below Daytona Beach, Lakeland, Miami, Orlando, Jacksonville and Sarasota but above Cape Coral and Fort Myers.

"Even though (several Florida markets) ranked ahead," Hale said, "weíre talking about fractions of a percentage so itís really not that big of a difference. The whole Florida area is expected to do quite well."

PREVIOUS COVERAGE: Tampa Bay home prices in 2016 saw biggest gain in six years but will 2017 be as strong?

For its 2018 housing forecast released today, ó an online company that operates under license from the National Association of Realtors ó rated the top 100 markets according to factors including employment growth, household growth and unemployment. In all categories, Tampa Bay fares considerably better than the national average.

The one category in which the bay area especially shines is new-home starts, predicted to soar by more than 20 percent next year. That would ease one of the biggest constraints on the local real estate market ó a shortage of homes for sale.

"It will help increase inventory because it creates new homes for existing homeowners to trade up to and frees up existing homes," Hale said.

Realtor.comís predictions for 2018 sound about right to Tampa Bay brokers.

"That 1.3 percent (sales growth) will probably be some new construction," said Alex Jansen of Coastal Properties Group International in Clearwater Beach. "Builders are trying to catch up but itís tough because they donít want to get caught where they were 10 years ago with a whole bunch of inventory."

With Pinellas County nearly built out, most of the bay areaís new houses are going up in southern Hillsborough and southern Pasco where land is still relatively cheap. For the three months ended in September, housing starts in those counties jumped nearly 20 percent year-over-year.

Jansenís firm deals mostly in existing homes, a market that continues to frustrate sellers, buyers and agents alike. Many owners with desirable homes donít want to sell for fear they would have no place else to go.

"Itís kind of like the chicken and the egg," Jansen said. "(Sellers) typically want to upgrade but they just canít find a good replacement so they sit tight. We hear it all the time, ĎWell, if you find a buyer let me know but I donít want to put my house on the market because I donít want to be homeless.í"

That scant supply of homes could cause prices to "creep up" more than predicts, says David Bennett, president of the Pinellas Realtor Organization. But even though itís a good time to sell, owners might have no choice but to stay put.

"With the inventory available, weíre all kind of captive in our homes right now," Bennett said. "It used to be that if you sold one home and had to stay in an apartment for a month or two until the next home closed, you could do that. But the demand for apartments is just as high."

PREVIOUS COVERAGE: Tampa Bay market Ďhealthiest in 10 yearsí as home prices continue to soar

Kurt Gleeson, managing broker of the South Tampa office of Premier Sothebyís International, doesnít expect the shortages to last much longer.

"I see it more as a short-term scenario in light of the projected growth in Tampa (Bay)," he said.

The biggest demand will continue to be for "moderately priced homes" ó those under $300,000 in most places but in the $500,000 to $800,000 range in expensive South Tampa.

"And thereís still demand for homes in the million dollar price point with the relocation of executives and other high net worth individuals," Gleeson said.

Jansen, on the Pinellas side of the bay, agrees.

"The existing high-end home market is the best itís been that I can remember," he said. "The volume is very strong right now; there are just a lot of million-plus sales coming down the pike."

On Tuesday afternoon, one of Jansenís agents, Kerryn Ellson, was showing a home in Clearwaterís Island Estates to a couple moving from Chicago.

Priced at $2.25 million, it fit some of their must-haves: A wide-open water view. Plenty of room for a boat.

But they said it seemed a bit small at 4,000 square feet.

Contact Susan Taylor Martin at [email protected] pr (727) 893-8642. Follow @susanskate.