I'm looking to purchase my first home here in the spring. I'm primarily looking at multis in the Tampa/St. Pete area. I've been spending what seems like every waking minute researching the market, US market, home trends in the area, and properties. But I'd like to get your opinion on the market here and the overall market as a whole. Do you think these prices are sustainable, going to continue to rise/drop, and does anyone foresee a bubble that, if burst, could ripple into our backyard?
Good morning @Morgan Ashford !
There has been talk about a bubble as prices continue to increase. You'll hear a lot of different thoughts and theories on it. Although prices are continuing to rise I think conditions now are different than they were before our last bubble. Trying to time these are difficult because there are so many factors that go in to driving the market - both on the national scale and at the local level. At the end of the day, it is a market and there will always be ups and downs. I wouldn't let the talk of a bubble or downturn deter you from getting into the market. In fact, some of the best deals can be found when the market is "down." While being cognizant of national trends doesn't hurt, I would suggest you focus on the streets/neighborhoods where you are looking to invest. Knowing exactly what is happening in your specific market/area will allow to to always make educated purchases even when the market takes a dip. If you are looking to build long term wealth, it is my opinion that rentals are the best avenue as you capitalize on monthly cash flow as well as overall appreciation of the asset. To insulate yourself from trying to time the market you should evaluate the cash flow of each deal more so than the purchase price (within reason). It sounds like you already understand this as you indicated you are looking for multifamily properties. The value of a property is less significant compared to the cash flow you receive on it if you are looking to hold long term. It's great you are educating yourself but don't fall victim to analysis paralysis. Too many people cannot take the first step to actually purchasing a property which, is the BEST education. This isn't to say buy before you're ready but I've seen so many stop short of purchasing our of fear, the unknowns, etc. BP is a great resource. Good luck and happy investing!
Hi @Morgan Ashford ,
I think the reason for any slip of prices right now would be a rise in interest rates. I believe because of the insane amount of development happening the prices are going to continue to rise. The demand is still there, Tampa is still the fastest growing city in Florida.
The prices have gotten really high in certain areas, and that has caused the First Time Homebuyers to start looking for properties elsewhere. Like Seminole Heights, Wellswood, South of Gandy, and those once so-so areas are now incredible ones.
There's an increase of rental inventory for rentals over $1500/mo. Developers are building apartment community after apartment community to service that need. I think they've overdone it, and I can see that mid level rental market being over saturated. I also think that those communities will convert to condos in the next couple years. Condo inventory is very low, and it's too difficult to get financing to develop a condo building, so they build apartments to get financing to then convert to condos down the road. So I think condos will likely dip in price due to more inventory being introduced into the market.
Tampa and St. Pete has a bunch of multifamily, however, they are all in the older or C neighborhoods. So you're either going to buy in a sketchy area, or a 1940 wood frame one, with 80 years of water and termite exposure.
Let me know if you wish to discuss further.
Hey I like my 1940's Home in South Tampa with 80 years of water and termite exposure!
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