TAMPA, Fla. — It pays to live in paradise, and paradise asks for quite a bit in return.
“It’s crazy to me that this lump sum of cash is just going to go good-bye," Julia Apostol said. Apostal and her fiance just forked over an $80,000 down payment for a home in the Seminole Heights neighborhood of Tampa.
After frantically searching for months on end, Apostal is just relieved the scavenger hunt is finally over. At least she hopes it is.
“Even under contract I still have some anxiety," she said. "Is this going to go through? Is there something else that’s going to happen? Is the seller going to change their mind?"
The instability of Tampa's housing market is enough reason to give her pause. Tampa ended 2021 as one of the hottest housing markets in the country with the average home value jumping nearly 30%. Zillow valued the average home in Tampa at $351,400.
“It has already been a really hot market and it’s going to continue to be really hot in the next year," Nichole Bachaud, an economist with Zillow, said.
In fact, Zillow ranks Tampa as its hottest housing market for 2022, leapfrogging from the fourth spot, last year. Bachaud tells ABC Action News Americans living in large metro areas across the country, and in nearby cities like Atlanta and Miami, are flocking to Tampa Bay because it is more affordable even if house prices suggest otherwise.
“It’s more so just the increase in demand overall and then the affordability that’s drawing people from all over and including within the region to these areas," Bachaud said.
She says Tampa will not sustain the record-high demand the area saw at the end of 2021, but she does admit it will not fall off enough to give home buyers much time to relax.
"Homes are still going to be flying off the market," Bachaud said. "We may have one, two, three extra days which is going to be beneficial for buyers as they are going to have a little bit more time to think things over and really consider all their options, but it’s still going to be really fast.”
“It feels like a gamble sometimes, but people need places to live," Apostol said. “You don’t know how the market is going to turn out, but ultimately you have no choice. You have to pull the trigger sometimes.”
It is a shot clouded by uncertainty and blocked by a number of obstacles.
"It's definitely a roller coaster experience," Apostol said.
First, there are not many move-in-ready homes on the market. The demand for housing far outweighs the inventory, and analysts say there are not enough new homes being built to catch up.
"There's just not a lot really," Apostol said.
What is left is overvalued and highly sought after.
“During the time that we were touring the house there were already cars in the driveway waiting for us to get out so that they could tour the house," Apostol said.
So how can you improve your chances of landing your dream house? Realtors tell us nothing is more important, right now, than polishing your offer to stand out from the crowd. Sellers are seeking 20% to 40% of the home's value as a down payment. Realtors suggest saving up to be able to offer an eye-catching cash-down payment.
“Just the housing market, in general, I feel like, has been ruthless as far as how expensive it is," Apostol said.
Even with the threat of higher interest rates this year, the heat of competition between home buyers rolls on as Tampa's housing market looks to stay a seller's market in 2022 and potentially beyond.
“It’s going to take several years for us to get back to what we consider to be a normal housing market," Bachaud said.