Last year a reporter for an online news service asked me, "Which beaten-up market will come back quicker and stronger?" One of my responses was "Tampa, Florida."

What I appreciated about Tampa was that unlike most other Florida metros, all of which were equally crunched during the Great Recession, this Gulf of Mexico port city boasted a diversified economy and less reliance on the low-paying tourist industry.

It was a counterintuitive call because earlier in the year, an S&P/Case-Shiller report listed Tampa as one of only nine cities in the country where prices were still at the lowest levels since the onset of the recession, meaning home prices had fallen even further than the lows set in spring 2009.

Indeed, 2011 wasn’t a good year for the Tampa housing market. The average sale price, which had a peak of $264,606 in December 2007, according to data from the Greater Tampa Association of Realtors (GTAR), fell all the way to a low point of $150,103 in February 2010. Then in January 2011, a new low was reached at $134,856, before the market bounced back.

So, did that mean I guessed wrong? Not necessarily. At best I could say my optimism about Tampa was just a bit premature, because 2012 has begun to look like a comeback year for the city and the state.

Sunshine has returned to Florida and to its real estate markets. Florida and Tampa are going through a "mini-recovery," declared John Tuccillo, chief economist for Florida Realtors.

According to Sally McFolling, GTAR president and director of sales and marketing at Homes by WestBay in Lithia, Fla., home prices in the Tampa metro have been rising all year. The data supports McFolling’s assertions. In January, average sale price stood at $143,940; then in the most recent numbers (from May) prices had risen monthly to hit $170,698, a substantial movement!

So, is the city in recovery mode?

I checked in with Stanley Geberer, an economist and senior associate with Fishkind & Associates Inc., an Orlando-based economic consulting firm. Geberer gave me a brief history of Tampa’s housing woes.

The metro generally includes Tampa in Hillsborough County; the sister city of St. Petersburg in Pinellas County; and various suburbs in other counties.

"St. Petersburg is an older city, and Pinellas County is technically built out," Geberer said. "To the north of Hillsborough is Pasco County, home to Tampa’s bedroom communities, which was highly overbuilt and overpermitted. Many tens of thousands of vacant lots were approved for construction and the inventory of vacant lots is very high. In Hillsborough, the inventory of vacant lots approved was not as high as in Pasco."

Here’s the problem, Geberer said: "The volume of residential units that were built at high prices and sold at high prices are now underwater. In terms of discontinuity, it created about 100,000 foreclosures since 2009. For 2012, we expect 15,000 to 16,000 new foreclosures and 10,000 more in 2013."

Geberer is not so enthusiastic about Florida’s mini-recovery. "Generally, single-family home prices declined throughout Florida in 2011 and at least through the first quarter of 2012. Depending on what market you are in, prices have continued to slip or flatten out. There are no markets in the state seeing robust price increases."

To which he added, "Florida is lagging the recovery in the rest of the nation because it is a very growth-dependent state, meaning it is dependent on the construction industry, which has been devastated. Secondly, since we are growth-dependent we are host to a lot of migrating residents, people who move down from the north. But, they can’t move down here until they sell their homes up north."

The solution to the recovery, said Geberer, is for the state to generate new jobs. Easier said than done.

In Tampa, Geberer said, the metro of almost 3 million people generated 36,000 jobs in 2011 and expects another 32,000 in 2012. Good, but not great.

"Tampa’s unemployment rate is about 8.2 percent, which sits under the state’s unemployment rate of 8.4 percent," McFolling said. "It’s nothing to get excited about, but we have seen companies move in, financial firms expanding and the military base (MacDill Air Force Base) generating jobs."

If employment and job creation are the keys, then there are still concerns about Tampa.

Lesley Deutch, a vice president with John Burns Real Estate Consulting, recently issued a report titled, "Florida’s Housing Market Is Booming, But Will It Last," in which she writes: "Every month, we analyze a litany of statistics for our research clients, and we have been pointing out a disturbing trend. Florida’s employment growth is slowing.

"Florida currently has the slowest year-over-year payroll employment growth of any region in the nation. Of the 20 metropolitan areas in Florida we analyze, 12 of them are now experiencing year-over-year job losses. While the larger metropolitan areas (Tampa, Orlando, Miami and Jacksonville) are still experiencing year-over-year job gains, the pace is slowing."

According to John Burns’ research, in November 2010, Tampa employment growth was about 10,000 annually. That rose to about 40,000 at the end of last year. By the start of the second quarter this year, the numbers dropped back down to the 25,000 range.

Nevertheless, McFolling remains optimistic. Taking a look at Tampa’s real estate market, she is very encouraged by the inventory picture. Back in 2007, inventory rose to almost 25 months.

In May 2012, that number had dropped all the way down to 3.7 months. Of that, about 28 percent or 29 percent are REOs and short sales, McFolling said. Back in that difficult year of 2007, almost 22,000 homes were in inventory. That number has declined to 7,770 homes.

Although, new home building has picked up in Tampa, Geberer expects the city’s continued but moderate job formation pace will help clear residential inventory. Still, he said, "Prices will remain flat until inventory will be worked through."

Or as Deutch cautioned, "Monitor the Florida economy carefully if you are investing there!"

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