July 12th, 2007 11:40 AM by Ron Mastrodonato
Tampa is a perfect candidate for a V-shaped recovery, according to research from Moody's Economy.com, an economic analysis, forecasting and credit risk firm. The local economy remains strong, and subprime lending is relatively low. Tampa's problem? A high investor share that lead to high vacancy rates. When the market turned sour in 2005, more than 25% of Tampa homes were owned as investment properties. Investors are quicker to flee during a downturn, thus creating a glut of available housing stock. In Tampa's case, vacancy rates now stand at 3.5%.
"As investors exit, the market revives," says Mark Zandi, chief economist at West Chester, Pa.-based research firm Moody's Economy.com, as fewer speculative buyers results in a more stable market. "Tampa's a pretty affordable market and first-time buyers can come in once prices fall."
In the market for a seven-figure home? How much domain your dollar will net depends on where you look. Click here to see homes in each state. Based on Moody's Economy projections, Tampa should burn off its excess inventory and hit a price trough in the first quarter of 2008, at which point prices are expected to increase by 10.6% the following year.