TAMPA, Fla. — When you drive through downtown Tampa, cranes dot the skyline. We are in a building boom, but what does that mean for home and rental prices?
At the Cuban Club, ABC Action News reporter Michael Paluska sat in a panel of experts for the second annual State of the Market held by Hillsborough County Property Appraiser Bob Henriquez.
"We see year over year continued increase in property value," Henriquez said. "Sale prices continue to be strong, despite the fact that interest rates have gone up. And then property insurance, I think, is the biggest issue we face here in Florida."
Despite market forces, developers say people are moving to Tampa in droves.
"We're in a great spot relative to a lot of places around the country. We're still seeing that influx, and maybe it slows down a little bit, but I think there's still some natural attraction to Tampa, Tampa Bay Areas," developer Darryl Shaw said.
Shaw just broke ground on the Gas Worx project in Ybor City. It will include 500,000 square feet of office space, 140,000 square feet of retail, and 5,000 apartment units.
"It's important for these projects and other projects, and we got hit kind of post-COVID — a lot of people moving to the area. So a lot more demand for housing than there was availability," Shaw said. "So we're starting to see a lot coming through the pipeline. So mine 2024 and 2025, I think the market from that perspective will soften a little bit, meaning the rents will maybe not go up as much or freeze pause for a while."
Real estate economist Ken H Johnson told Paluska that more units coming online would slowly stabilize the market. But, for now,rents in Tampa are some of the highest in the country, according to a recent report by Florida Atlantic University.
"If you rent the average unit in Tampa, Florida, your family needs to have a combined household income of $84,750," Johnson said. "We have to work towards an oversupply."
Johnson is also the Associate Dean of Graduate Programs at FAU College of Business.
"So one way to work out of this is to, I hate to say it is to stop concentrating so much on affordable housing; it's so political, it's so difficult to do because of the price points on the land and putting a unit in and making it affordable. Let these developers go out there and develop at the higher price points. But I would push them to develop large numbers," Johnson said. "It's going to be really, really hard to build our way out of this. It's gonna take time. I think it's better to try to step on and put the accelerator down on the multifamily projects."
Johnson said they produce three monthly interactive indices that viewers would find helpful. They are by rent and investment, housing prices, rent prices, and affordability.