Housing market research firm Zonda has ranked Tampa Bay and the west coast of Florida No. 6 on its list of the top 10 metro areas to watch in 2021.
The top spot went to Salt Lake City, followed by Nashville; Raleigh, N.C.; Sacramento, Calif.; and Riverside/San Bernardino, Calif. San Antonio ranked seventh, while Indianapolis; Columbus, Ohio; and Florida’s east coast rounded out the top 10.
Zonda cited strong net migration and home sales as the primary reasons for the area’s high rankings. According to its research, home sales increased by 41 percent, year over year, from 2019 to 2020. New home sales were particularly strong, with a year-over-year increase of 37 percent.
Kristine Smale, Zonda’s senior vice president of advisory services, is based in Fort Myers but studies trends affecting all of southwest Florida. She said good weather and no state income tax are the standout factors that drive migration to the region, but less discussed is the growth of high-wage jobs in sectors such as technology and financial and professional services.
“There are really some great employment opportunities here,” Smale said in an interview with the Catalyst. “Over the past 10 years, the economy has really shifted, and I think that’s often overlooked.”
Smale said transportation is often thought of as the Tampa Bay region’s Achilles’ heel, but in a broader context, the area’s connectivity with Orlando — whose economy is also rapidly diversifying — is a selling point for people and businesses looking to relocate.
“You’ve got these two huge metropolitan areas that are economic drivers and they’re only an hour and a half from each other,” she said. “Eventually, as the build-out continues in Hillsborough County and along the I-4 corridor, it’s all going to be the Tampa-Orlando area in the future. The two metros are just going to blend together even further.”
The region faces its fair share of challenges, though. According to Smale, housing supply needs to be addressed in the near future if Tampa Bay and surrounding areas want to remain in the top 10 most attractive markets.
“There needs to be places for people to move to,” she said. “Our housing supply is very limited. Inventory is very tight.”
Home prices are also a factor that could deter population and economic growth.
“Price appreciation is very high on a year-over-year basis,” Smale said. “Low mortgage rates have been able to cushion that blow for now, but they’re not going to stay low forever. As prices continue to rise, we’ll see affordability crunches. It’ll be harder to find more affordable housing. So unless we really create additional supply that can temper some of the price appreciation and meet demand, we may be in trouble and could have some missed opportunities.”
Overall, however, Smale said she and her colleagues at Zonda are “very bullish” on the Tampa Bay area.
“It’s really the best of both worlds where you have the waterfront lifestyle, but you also have professional sports teams and a thriving downtown that’s growing, both in St. Pete and Tampa. But you’re also much less expensive compared to say, Miami, which offers the same benefits. So I think there’s just so much going for it.”