The Tampa Bay real estate market, which has seen explosive growth in recent years, may experience a slight dip in home prices next year, according to a recent report by Zillow. The report forecasts a roughly 2% drop in home values for 2025.

However, local realtors, like Sunny Alexander, broker and owner of Red Sash Realty, are optimistic about the market’s trajectory.

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“All the numbers I’m seeing suggest a healthy, balanced market, with annual appreciation of about 3 to 5 percent,” Alexander explained.

The Current Market Climate

Alexander described the current market as chaotic, with high demand tempered by fluctuating interest rates, recent hurricanes Helene and Milton, and buyer hesitation, particularly around the upcoming election.

“It’s been a wild ride,” she said.

Diverging Predictions

While Zillow and a national housing report by RE/MAX suggest a potential decline, Alexander believes the market’s future depends on location.

“When you get into Tampa’s suburbs, I think we’ll see slight price drops in new construction,” she noted. “Supply is incredibly high, and land there is easier to come by.”

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In contrast, Alexander expects urban neighborhoods like Seminole Heights and South Tampa to retain strong home values, albeit with more gradual appreciation.

“In those areas, the land is still very expensive, so home values will likely continue rising, but at a slower, more sustainable pace,” she said.

A Return to Stability

Alexander pointed to the unsustainable growth of 2021, where property values surged by 25% per quarter.

“Those days are over,” she said. “We’re transitioning back to a healthy, stable market.”

Encouraging Signs for Sellers and Buyers

A healthy market is critical for both sellers and buyers. The RE/MAX report indicated positive trends in November, with homes selling faster compared to October—a decrease of about 8% in average time on the market.

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While the predictions for 2025 vary, many in the real estate industry are hopeful for a more balanced and sustainable market in the years to come.

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(Image credit: Martin Barraud/Getty Images)