Tampa Bay Real Estate Bubble Burst? Unlikely

With property prices seemingly on the rise and rising quickly in Tampa, there is a lot of talk about a real estate bubble in the US and dire predictions that the so-called bubble could burst, leading to a lack of confidence on the part of investors and people seeking a second home. But while this talk of a bubble may be true in some parts of America, it isn’t justified in Florida, particularly in the Tampa Bay and Clearwater areas.  

Florida as a whole is enjoying a rise in property prices which promises to be a long term trend. There are many reasons for this.

Demand for real estate in Florida is increasing.  Homes are being bought for various reasons. Both American and European holiday makers view Florida as a premier summer holiday location and flock there each summer and historical evidence suggests that this figure is rising sharply and is having a major economic impact on the region according to VISIT FLORIDA research. 

Historic Visitor Numbers (in Millions) 

  • 1999    58.9
  • 2000    72.8
  • 2001    69.5
  • 2002    73.9
  • 2003    74.6
  • 2004    79.7 

Historic Economic Impact

Total Tourism Spending 1999-2004:

  • 1999 – $44.6 billion
  • 2000 – $48.5 billion
  • 2001 – $48.6 billion
  • 2002 – $49.5 billion
  • 2003 – $51.5 billion
  • 2004 – $57.0 billion

Total State Sales Tax Revenues from Tourism 1999-2004:

  • 1999 – $2.7 billion
  • 2000 – $2.9 billion
  • 2001 – $2.9 billion
  • 2002 – $3.0 billion
  • 2003 – $3.0 billion
  • 2004 – $3.4 billion

Number of Persons Directly Employed by Tourism Industry 1999-2004:

  • 1999 – 826,200
  • 2000 – 842,900
  • 2001 – 864,500
  • 2002 – 862,900
  • 2003 – 871,000
  • 2004 – 912,700

This growth in visitors is due to Florida’s many attractions, many of which are near to Tampa Bay. The superb beaches, the night life opportunities, golf and other sporting opportunities whether playing or being a spectator, the theme parks and adventure worlds, Disney, of course – and the many areas of unspoiled beauty.  And, if anything, this annual visitation is set to increase again as the Super Bowl comes to Tampa in 2009.  This will be the fourth Super Bowl to be held in Tampa.  This has a dramatic effect on our area’s prosperity.

The increasing economic prosperity also makes Florida in general and Tampa Bay in particular a good place to find a job or start a business. In 2004, Florida was ranked #2 as one of the best places in America for start-ups. More and more companies are also relocating their headquarters to Tampa, as well.  Tampa is now being called the “Gateway to the Florida High Tech Corridor”, because companies are being offered a matching grant program that has generated more than $120 million in applied research.  225 companies have already taken advantage of this.

The area has relatively low real estate prices and a lower cost of living and higher employment statistics compared to the rest of Florida and to other states in America, despite recent increases. The median value for a home in Florida was $189,500 last year, significantly less than similar homes in California where the median home value was $474,370. (Source: www.investmentu.com/IUEL/2004/20040927.html ).   In Tampa Bay, it was less again.  

Florida, including Tampa, also enjoys the advantage of having slightly more favorable property taxes compared with other parts of the US, no state income tax and better car insurance rates. The education system has undergone considerable improvement over the past number of years. And the Tampa area also has some of the best commute to work times in the country. 

Tampa Bay is perhaps the ideal place not just for the baby boomer buying a second house or holiday home, nor just for the property investor seeking to increase their footprint in the holiday rental market, but also for people starting out in life or those seeking a retirement home.  

There have been several new developments in Tampa Bay Florida real estate and Clearwater Beach real estate holdings; the plans for developing downtown Tampa, especially the Rivergate area, are potentially very exciting indeed, according to recent articles in the Tampa Bay Business Journal. 

In short, Florida as an area for either relocation, investment or a second home is currently one of the most attractive in America and likely to remain so for some time.  Due to the recent economic pressure on the US as a whole there might be a slight slow down in terms of escalating appreciation but Florida remains a great place to come and a great place to invest, especially Tampa Bay real estate and Clearwater Bay real estate, which are right in the heart of the potential growth areas.  

No bubbles bursting here, just opportunities galore!

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