Tampa, FL – Tampa, like many other cities across the U.S., has weathered the housing crisis in hopes of a rebound in the market. Unfortunately, it appears the composition of this housing meltdown and recession are of unusual characteristics, that has eluded normal applications used for previous economic resolutions. Let us examine the drastic contrast in today’s economy as compared to 10 – 20 or even 30 years ago.
In 1980 a typical home in Tampa and Florida sold for about $45,000 and by 1990, $77,000. By 2001, the value of a home in Tampa had risen to $105,000 and by the year 2006, $240,000. The increase in prices or home value per decade, were calculated based on inflation and interest rates in earlier years, but not so in more recent times.
Even factoring in Tampa having 118 public golf courses, 5,063 restaurants, 72 libraries, 17 colleges, universities or professional learning centers, 434 bars, an average high of 89.7 degree weather in July and a low of 52.40 degree weather in January and many other amenities, could in no way, constitute an increase in home values of over 100% in five years.
Wages for middle or upper lower class Americans had not increased on the same upward sliding scale as the price of homes during the past 30 years. A cost of living increase had not occurred across the board for workers and consumers to keep pace with higher costs of goods and services reflective of higher home values. So the next best thing to do was borrow either through refinancing a home mortgage or a credit loan, (the home as collateral in most cases). It was a classic setup for the good life, but also for failure due to so much riding on an over-inflated financial design. The mortgage and credit balloon expanded from city to city and state to state as corporate and financial giants salivated on the latest profit scheme.
Thousands began purchasing homes with credit, but no money and using the homes to purchase other properties, still with no money. Others were deemed eligible to purchase homes even if their ability to pay was suspect. In addition, if they were able to pay, many had unknowingly signed on to variable rate mortgages and not fixed rates. The variable or adjustable interest rates were subject to increase due to market fluctuation and the mortgage payment would sometimes increase by 50% and become far out of reach for the homebuyer. The homebuyer then faced foreclosure.
By 2006 the balloon had reached its expansive limit and then popped, the housing market imploded, banks failed one after another, massive layoffs began for the upcoming 20 months and finally the stock market plummeted in 2008.
Tampa wasn’t alone when the bottom fell out, but that didn’t cushion the fall. The fall was painful and widespread as a domino effect played out and foreclosures swept through Tampa, Las Vegas, Miami, Detroit, Atlanta, cities throughout Arizona, California and across the nation. Home owners were displaced to find other means of residence like living with relatives, in hotels, shelters or apartments.
In Tampa, there are few vacancies in apartment complexes since the housing market decline and builders have taken notice.
Apartment complex builders have and are building new units in the Tampa area. Over 3,646 units are either complete or are under construction in Hillsborough and Polk counties. An additional 12,300 units are proposed for construction in Hillsborough, Pinellas, Pasco and Polk counties.
Tight credit, foreclosures, and condo to apartment conversions are helping the increase in apartment demand. Cheaper land cost and the cost of construction has gone way down which makes it more feasible to build apartments in or near Tampa.
The rental occupancy rate in Tampa, FL is at 92% and is forecast to reach 94% at year’s end. How long will this trend continue in Tampa and nationwide, no one knows exactly. What is certain, is the loss of homes and high salary professions have directly effected the purchasing power and accumulated wealth of the middle and upper lower class citizens.
In today’s economy much of the wealth has shifted from the middle class to the corporate and very wealthy class and all the debates and battles of ideologies are futile. If you are of the middle or lower class, the reality is to adapt to a new system and shift to survival mode because as you can see the 80s, 90s even the early years of 2000 are in complete contrast as compared to the dismal economy of today as remnant of the huge appetite of capitalistic greed and mismanagement.