Tampa is one of many metro areas in the U.S. experiencing a sharp increase in home prices, partially because of job growth and strict land-use regulations. Zillow’s research, with help from the Wharton Residential Land Use Regulation Index, shows the correlation between the two sets of data.
Job Growth Boosts Demand for Housing
Throughout the U.S., demand for homes has been increasing in metropolitan areas experiencing job growth. In general, job growth correlates directly with an increase in the demand for housing, which in turn increases the prices for homes in those areas.
To keep up with growing demand, construction is increasing in many areas experiencing strong job growth. However, this is guided heavily by land-use regulations. Depending on the strictness of land-use regulations, home prices can fluctuate significantly as demand remains unmet.
Strict Land-Use Regulations Pushes Home Prices Upward
The stricter the land-use regulations are in a certain area, the higher the home prices are likely to be. In most cases, when land is not available for residential construction or when it’s impossible to change the zoning of land to make it available for residences, home prices increase greatly.
In areas throughout the United States with the strictest land-use regulations, home values increased by 25% for every 10% growth in employment over the same period. This is compared to a 14% increase in home value per 10% growth in employment on average in the country.
This is because land-use regulations can limit the amount of construction for an area, which imposes another barrier on the housing market. At the same time, job growth causes an influx of people moving to an area, making the housing market tighter.
When a metro’s job market is growing and construction is limited, home prices naturally increase more than normal, as the housing market struggles to meet the demand.
Tampa Market Affected by Strict Land-Use Regulations
Tampa has been experiencing rapid population growth since 2010, along with the associated challenges. With job growth at 16.6% in that period, housing prices skyrocketed 35.4% compared to 19.6% nationally.
The disparity between job growth and housing prices can be explained by the moderately restrictive land-use regulations throughout Tampa Bay. The housing market has not been able to grow at the same rate as the job market. New developments are always in progress, but often not enough to match the needs of the rapidly growing city. As a result, Tampa’s home prices are increasing at a much higher rate than the national average.
Benefits of Working with an Experienced Mortgage Broker
When competing for a home in a tight housing market, an experienced mortgage broker can help you gain a competitive advantage when buying a home.
Here are a few ways an experienced mortgage broker can help.
Trusted Pre-Approvals: Getting a mortgage pre-approved by a highly reputable mortgage company can significantly help you during the negotiation process, especially if there are multiple offers for the same property. Your offer will be taken more seriously since the Realtor and seller can be sure you’ll be able to close on the home.
Quicker Closings: When you can close quickly on a home, you are in a stronger position to win the home over other buyers, and possibly negotiate on the price. That’s because sellers can save a great deal of money if they can close before making their next mortgage payment. And, sometimes sellers must sell quickly to buy another home already under contract.
Low Interest Rates: Getting a low interest rate on your mortgage means you will save money. Furthermore, if you are competing for a home and need to increase your offer to win, a low interest rate gives you room to negotiate.
Rising home prices in Tampa are unlikely to slow in the near future, especially as job growth continues to rise.
And besides, Tampa Bay communities are constantly ranked as some of the best places to live. Such rankings reflect the high quality of life in Tampa Bay, which is a main reason why a lot of people want to live here and vacation here.
So, if you are buying a home in Tampa Bay, you certainly want an experienced mortgage broker in your corner.
Marimark Mortgage is based in Tampa, Florida and serves the mortgage needs of homebuyers, homeowners, and investors in Florida, Virginia, and Pennsylvania.
We specialize in conventional home mortgages, FHA, VA and USDA mortgage options, refinance loans, and reverse mortgages. We’ve worked extensively with cash-out refinancing, and help clients with HARP refinancing to lower their monthly mortgage payments.