When you're looking for a home, there are a few things you'll need to consider—especially if you're a first-time homebuyer. First, research the top areas where you want to live. Are you more concerned with nightlife, climate, or culture? Or do all of those things matter to you? Next, consider what kinds of amenities are important—the number of bedrooms and bathrooms, schools, parks, and shopping are just some of the things that can help shape your decision. Location and amenities, combined with a whole other range of factors will help narrow down your budget. If you've decided that you can afford $175,000 and you're set on moving to the Tampa-St. Petersburg-Clearwater area, you're in luck. Here's what that budget will buy you in this market.

Key Takeaways

  • The median listing price for a home in the Tampa-St. Petersburg-Clearwater area in January 2020 was $279,450.
  • Most homes sit on the market for a little more than two months.
  • $175,000 can get you a modest one- to five-bedroom home or a condo/townhome in a gated community.

Tampa-St. Petersburg-Clearwater

The Tampa-St. Petersburg-Clearwater area lies along the Tampa Bay Gulf Coast. The main cities in this area include Tampa, St. Petersburg, Clearwater, Brandon, and Spring Hill. According to 2018 estimates, the area is home to more than 3.1 million people. The median age of its residents is 42.3 years, and the median household income came in at about $55,000.

The area has a fairly well-balanced economy that's considered to be very business-friendly. Some of the key industries include finance, health care, information technology (IT), and tourism. The unemployment rate in the area was 2.6% in December 2019, according to the U.S. Bureau of Labor Statistics (BLS). That's well below the national rate of 3.5%.

It's a great place to live if you love hot, humid summers and dry winters. November, April, and March are typically the best months during the year. And you won't have any problem finding things to do. The arts and culture scene is fairly sizeable with different museums, farmers' markets, musical events, and performing arts, not to mention a vibrant nightlife. The area is also known for its beaches, theme parks—notably Busch Gardens—zoos, and aquariums. You'll also be able to watch spring training for a number of Major League Baseball teams if you're a sports fanatic.

The Area's Real Estate Market

The area's median listing price has been steadily on the rise. As of January 2020, the median list price for a home was $279,450—a year-over-year (YOY) increase of 5.7%, according to realtor.com. The average home in the area sits on the market for 66 days—a little more than two months.

You'll find a diverse range of homes listed on the market in the area. Properties for sale on realtor.com for the Tampa-St. Petersburg-Clearwater area range in price from $7,000 for a one- or two-bedroom mobile home to a seven-bedroom, six-bathroom 9,000-square foot home on 4.5 acres for a cool $8 million. The one-of-a-kind estate comes with iron gates, views of Tampa Bay, and its own dock.

Listings in the area range between $7,000 to $8 million.

The Tampa-St. Petersburg-Clearwater market is very hot, according to Zillow. The site predicts that home prices will go up 4.2% over the next year. Tampa topped Zillow's top 10 list of best cities for first-time homebuyers in 2019. Las Vegas and Phoenix rounded out the top three, while Charlotte, North Carolina, rounded out the list at 10th place. Cities were ranked based on four different factors:

  • Lower median home values and smaller down payments
  • A stronger chance at home value appreciation
  • A higher inventory-to-household ratio
  • Higher number listings with price cuts

What $175,000 Will Buy

If you don't want to sacrifice your budget but still want a good buy, the site has about 750 homes listed for sale below the $175,000 price point.

If you're looking for a single-family home, you'll find one-story, ranch-style houses with one to five bedrooms and one to four baths. Size varies greatly—$175,000 can get you anything from an upgraded two-bedroom, one-bath bungalow with 850 square feet to an older five-bedroom, four-bath house with over 3,000 square feet. Many properties have updated kitchens including granite countertops, stainless steel appliances. The rest of the homes may come with hardwood/tile flooring, en suite baths, walk-in closets, and mature landscaping. Some properties are part of homeowners' associations that offer community amenities like swimming pools, and a few have private pools and/or spas.

Or you could opt for a condominium or townhome. In this market, you're like to find mostly one-bedroom, one-bath or two-bedroom, two-bath units. At this price point, buyers can find hardwood/tile flooring, updated kitchens with granite countertops, and community amenities including swimming pools, tennis courts, and fitness centers. Properties in this market, of course, come with homeowners association fees (HOA).

Rent or Buy?

According to Rent Cafe, the average rent for a one- to two-bedroom apartment in the area is about $1,350 per month. Sounds cheap, right? Cheap enough that you may want to forego that dream of owning? Think again.

The Rent vs. Buy Report released by online real-estate aggregator Trulia shows it is much cheaper to buy than rent. The report compares costs for a seven-year period using five calculations:

  1. The average rent and for-sale price for an identical set of properties. For example, the costs of buying a $175,000 home and what it would cost to rent the same house.
  2. The initial total monthly costs of owning—assuming 20% down and a 30-year fixed-rate mortgage at 3.5% interest, as well as annual maintenance, insurance, utility, and property tax expenses—and renting. This includes your monthly rent plus renter's insurance.
  3. The future total monthly costs of owning and renting.
  4. One-time costs and proceeds. For owning, this includes closing costs and capital-gains tax of 15% for gains above the $500,000 annual exclusion. For renting, this includes one month's security deposit.
  5. The net present value to account for the opportunity cost of money.

How long you plan on living in an area, the mortgage rate you secure and your tax bracket are all key factors in deciding whether it makes better financial sense to rent or buy. For example, if your target home price is $180,000 and you get a 4.00%, 30-year fixed-rate loan, you're in the mid-range tax bracket and plan on living in the home for seven years, it'll be significantly cheaper to buy than rent in Tampa-St. Petersburg, according to the Trulia report. That is, assuming it would cost $1,350 per month to rent a similar property.

The Bottom Line

The Tampa-St. Petersburg-Clearwater area has a diverse real estate market that ranges from mobile homes to lavish estates along the coast. And you can still find value in this market even if you're limited to a strict budget. With merely $175,000 to spend, you can certainly find comfort and character in the area. To get more bang for your buck, be sure to check out many of the short sales in the area.