2021’s Frothy Real Estate Boom: Is It Another Bubble?

Last year Westchase area home values shot up by a jaw dropping amount. Will this time around be different than the 2005-2006 rocket ship ride, which ended in collapse?

It’s long enough ago that some may have forgotten, but long-timers remember it well. In 2005, Westchase real estate values rocketed up by nearly 25 percent. The next year piled another 12 percent increase on top of that. It seemed every other Westchaser was involved in home flipping and buying investment properties, many using their Westchase home’s equity as collateral.

Then the Florida real estate market collapsed. Houses lost nearly one-third of their values. In the years between 2009 and 2012, one of every five homes sold in Westchase was a foreclosure or short sale.

Some may be looking at 2021’s price increases and wondering, like Yogi Berra once said, if it’s “Deja vu all over again.”

Wild Westchase

In the Westchase Community Association (WCA) in 2021, 260 homes sold, about an eight percent increase over the average annual number of homes sold during the last decade. Last year Westchase homes went for a square foot average of $229.48, an 18.7 percent price increase for 2021—a rocket-like trajectory compared to the 3.2 percent increase notched in 2020 and the 2.19 percent increase in 2019.

The average increase of $36 per square foot caused Westchase homes, on average, to sell above the $200 per square foot for the first time in the community’s history.

Last year’s home price increase represented the biggest jump since 2005, the beginning of the real estate bubble, whose explosion led to that foreclosure crisis and the Great Recession. The 18.9 percent Westchase price increase represented the second biggest annual price change since WOW started tracking local real estate prices in 2003.

The numbers also suggest a healthy bidding war for a lot of Westchase homes. Only a quarter of Westchase homes sold for below their asking price. Another quarter sold for their asking price. Meanwhile half of Westchase’s homes went for above their listed prices. In terms of housing supply, however, the number of Westchase homes sold has remained relatively consistent (It has floated in recent years between 7-7.5 percent of total homes.). Even during 2021, the first year of the pandemic when many might expect a decline in people willing to show and sell homes, there was no notable downturn. In fact, 31 more homes sold in Westchase in 2021 than the year prior and four more homes than sold last year.

What sold? Of the 260 homes that sold, 21 were condominiums in West Park Village, 35 were townhomes (seven of them in Berkeley Square, one in The Enclave and the rest in West Park Village) and 18 were villas, seven as part of duplexes in The Bridges and 11 in West Park Village. The balance, or 186 of the homes, were single family homes, including the unique ones that are part of The Vineyards.

It was a strong sellers’ market. Westchase homes sold blisteringly fast—in under eight days on average. Yet the median time it took to sell (with half of Westchase homes selling faster and half selling slower) was a shockingly fast three days. Thirty-six percent of Westchase homes sold in all cash deals with no mortgage in 2021, double the 17 percent of homes that did so in 2020 and 19 percent in 2019.

The least expensive Westchase home sold on April 1 for $179,000. It was a 1,184 square foot Berkeley Square townhome with two bedrooms and 2.5 bathrooms. It went for a bargain price of $151.18 per square foot. On a square foot basis, however, the least expensive home was a 3,478 square foot Greensprings home, listed as having four bedrooms and four bathrooms. It sold in July for $129.38 per square foot ($450,000), at 74 percent of its asking price. That Greens home, involved in the establishment of a trust, appears an anomaly, however; just three months later, it resold for $930,000 and was listed as having one more bedroom than before.

Three Harbor Links/The Estates homes sold in Westchase for more than $1 million in 2021, a first. The most expensive was a 4,626 square foot home with four bedrooms and four baths on Marblehead Drive that sold for $1,145,000 in June ($237.57 per square foot). It was also physically the largest home that sold in the community last year.

The most expensive Westchase homes per square foot, however, sold in Radcliffe, all going for over $313 per square. The highest square foot price award went to a 2,431 square foot home on Keating Drive. That four-bedroom, three-bath home sold for $800,000 at $337.31 per square foot—47 percent above the Westchase average.

A breakdown of the sales data illustrates that while the increases occurred throughout the year at a strong pace, the second half of the year saw some small cooling of the torrid increases. Through June 30 Westchase homes saw average prices hit 217.75, a 12.14 percent increase while the year’s second half, with average prices hitting $240.02, represented a 10.2 percent increase over the first half of the year.

As has happened in the past, Westchase’s neighborhoods saw different real estate performances. Offering the most blistering rise were the 11 homes that sold in Radcliffe, which rose a staggering 31 percent in value to $260 per square foot, the highest square foot price fetched by single family homes in Westchase. Also outperforming the Westchase average were homes in The Bridges ($239 per square), The Fords ($242 per square) and homes in Keswick Forest, Glenfield, Woodbay and Bennington ($241 per square), all of which notched 21 percent gains in 2021. In The Bridges and The Fords cases, the amazing gain came on the heals of an 8.2 percent and 7.5 percent previous gain in 2020 respectively. While the homes in The Bridges (1,850 sq. ft. on average) and The Fords (2,640 sq. ft. on average) are notably smaller than the average home in West Park Village (3,100 sq. ft.), the square foot prices fetched in The Bridges and The Fords are now $13 and $15 higher respectively.

Also outperforming the Westchase average were homes in The Greens and Harbor Links/The Estates which saw their prices rise 20 percent on average to $242 and $254 square feet respectively.

Performing on average were single family homes in West Park Village (not including the townhomes, condos and villas there), whose 19 percent increase brought their square foot prices to $226.

Among the weaker performances (yet still notching eye-opening numbers) were homes in The Shires, which rose 17 percent to $233 per square foot, Berkeley Square townhomes, which posted a similar 17 percent gain to $178 per square foot, and homes in The Vineyards, which rose 16 percent to $213 per square. The Vineyards, however, was coming off the biggest Westchase increase in 2020, when they rose 12.9 percent in a year when the Westchase average increase was just 3.2 percent. This past year West Park Village townhomes also saw a 15 percent rise to $213 per square.

The Westchase homes seeing the smallest gains last year were West Park’s Villas, which are duplexes. After two years of posting the highest square foot values in Westchase, the Villas’ torrid performance cooled relative to other Westchase units. At $248 per square foot, they’ve now fallen behind Radcliffe ($260) and Harbor Links/The Estates ($254). The Villas notched a 14 percent gain 2021.

Meanwhile Tree Tops, high end luxury homes that sit off the north end of Montague Street (just outside the Westchase Community Association) saw four of its nine homes sell for over $1.1 million. Tree Tops’ overall increase, while still a very respectable 12.7 percent to $258 per square foot, still underperformed the average Westchase area increase.

Suggesting Westchase Realtors may be the some of the best compensated employees by hour worked locally, Westchase homes barely sat on the Multiple Listing Service before flying under contract. Homes in The Vineyards sold in three days on average while homes in The Bridges took an average of four days. Even the slowest selling homes, those in The Shires, spent barely over two weeks on the market on average, one-third of the time they took to sell in 2020.

Westchasers who decided to sell their homes in 2021 had to have their future housing arrangements in order beforehand. The average home sold in less than eight days, in contrast to the four and half weeks it took to sell a home in 2020.

Northwest Real Estate

As impressive as Westchase’s 18.7 percent home price rise was, a number of neighborhoods to the north proved even hotter real estate markets in 2021. While Highland Park overall saw housing values rise 17.5 percent, nearly matching the Westchase performance, Highland Park’s Single Family Homes, the architectural equivalent of those in West Park Village, rose 24.7 percent to $232 per square foot. After closely trailing West Park’s equivalent homes in recent years, Highland Park’s neotraditional homes now cost six dollars more per square foot, despite having significant Park Place Community Development District debt assessments (West Park’s Westchase CDD debt assessments were paid off a couple of years back.)

Highland Park townhomes also saw an impressive increase, rising 19.9 percent to $199 per square. Meanwhile, Highland Park’s Coach Homes, duplexes located at the corner of Race Track and Mobley, showed the smallest increases in the neighborhood. While the neighborhood saw an impressive 9.3 percent in home values in 2020, the four homes that sold there last year only posted a 1.9 percent increase, the lowest across all the neighborhoods WOW tracks.

As impressive as Highland Park’s Single Family Homes’ 24.7 percent increase was, the homes in Westchester saw home values rise even more. The 26 homes that sold in that neighborhood’s three subdivisions posted a scorching 26.9 percent increase, tops among all the neighborhoods tracked. Westchester homes blasted through the $200 per square foot barrier for the first time in their history, coming in at $231 per square foot, a $49 per square foot increase over the previous year. The increase more than offset Westchester’s 2020 1.1 percent increase, which was among the area’s most anemic.

Marking the third highest increase among the neighborhoods tracked were the homes in Westwood Lakes. Their 23.5 percent increase in 2021 also blasted the community through the $200 square foot barrier for the first time in its history. Now fetching $231 per square foot, their price is now five dollars per square foot higher than West Park Village’s single family homes.

Having an equally impressive year were the homes in Mandolin Reserve. After posting a flat performance in 2020, the two homes that sold there in 2021, while a small sample, notched a 23.4 percent increase to $218 per square foot. Meanwhile, across Citrus Park Drive, Mandolin Estates, which had 2020 prices $15 per square higher than Mandolin Reserve, posted a more modest 16.2 percent increase to $222 per square. Now the square foot home prices in the sister neighborhoods are separated by only four dollars.

Meanwhile the townhome community of Windsor Place posted an 18.9 percent increase to $195 per square foot, trailing Highland Park townhomes by just $4 per foot and West Park Village townhomes by $18 per foot. But if you wanted a Windsor Place townhome, you had to move fast. The 35 townhomes that sold the community in 2021 sold in a sizzling four days on average.

Of all the Northwest neighborhoods WOW looked at West Hampton posted the second most modest increase, still a solid 12.1 percent increase to $203 per square. The neighborhood, however, was coming off one the biggest increase of any neighborhood followed in 2020, when it posted a scorching 19.1 percent increase. West Hampton homes also sold fourth fastest, with the five homes that sold there in 2021 sitting on the market only an average of 10 days.

The rest of the homes throughout the Northwest also didn’t last long on the market. After taking nearly six weeks for a typical sale in 2020, last year the 31 homes that sold in Westchester sold in an average of eight days, matching the 35 homes that sold in Westwood Lakes. Highland Park single family homes typically sold in just under two weeks. Even the relative slowpokes in Mandolin Reserve took only three weeks to sell, one-third of the time it took in 2020.

Breaking It Down

While it was clearly a historic year for home prices in our area, they reflected a similar jump throughout Tampa Bay and in the nation at large. What’s different now than in the previous real estate bubble? For one, while there has been a strong uptick in investor purchases, stricter mortgage requirements are keeping buyers who shouldn’t be borrowing in check. Instead, much of the current real estate is being driven by a lack of housing stock, caused by a lack of building, an influx of millennial buyers, older Americans hanging on to their homes instead of downsizing and a sizable market of northerners looking for vacation homes, a trend that started at the height of the pandemic and which is perhaps reflected in the number of all-cash purchases.

While a 19 percent increase is substantial, it also must be viewed in conjunction with inflation, which ran seven percent in 2021, the highest in four decades. Real estate values historically follow inflation. If inflation stayed in the two percent realm, a 19 percent increase would look very different than a 19 percent increase in a year of overall price jumps of seven percent. The real overall increase, once inflation is factored in, is 12 percent. While still a sizable annual jump, it is much smaller than the real increase back in 2005 when local home values jumped nearly 25 percent in a year that saw 3.4 percent inflation.

Is it sustainable? That’s where the experts start to disagree. Those bullish on home prices feel that the lack of supply of homes will continue to drive solid price increases for the next half decade until builders catch up. The bears, however, point to an American population, not counting immigration, that is now shrinking. They also point to the utter unaffordability of home purchases that such price increases create when overall wages don’t keep up. Meanwhile, the Federal Reserve, which sets interest rates that will affect mortgage rates, is looking at four possible increases this year.

What will 2022 hold?

Regardless of whom you choose to believe, keep in mind the observation about economic predictions offered the famous economist John Kenneth Galbraith. “The only function of economic forecasting,” he once said, “is to make astrology look respectable.”

By Chris Barrett, Publisher

Editor’s note: WOW thanks Wendy Ross of Florida Executive Realty for providing all the home sales data on which this report depended.

WOW’s Real Estate Special

WOW thanks the following businesses for helping to bring you the Real Estate Special.

EDITOR’S NOTE: The listings on this page represent paid advertisements in conjunction with the Real Estate Special. Paid advertising is not an endorsement by WOW, Inc. Interested residents should contact the agents/agencies and ask all relevant questions prior to engaging their services.

Beth Cupari
Florida Executive Realty
(813) 363-7802; BethCupari@gmail.com
Choosing the right Realtor® does make a difference! Providing expert real estate services for buyers and sellers. Staging professional. Luxury home specialist. Certified residential specialist. Certified negotiation expert. Over $190 million sold.

Florida Executive Realty
(813) 324-2440
A commitment to excellence.

Gigi Gauthier, Realtor
True Realty Group
(813) 928-0743
Westchase resident. 24 years of experience. Call Gigi when looking to buy or sell your home. Ask for a copy of her free book.

Anne Hart
Florida Executive Realty
(813) 215-0734
anne@hartoftampa.com
Full time professional—21 years. Call Anne whether buying or selling. Top Producer 2021.

LE Real Estate Group
(727) 243-2000 cell/text; LeaRealty@gmail.com
Lea Haverstock, Broker/Owner. Residential and commercial. Westchase real estate expert. 18+ years of experience, luxury estates, relocation expert and multi-million dollar producer. Westchase resident. Team of nine agents. www.LERealtyGroupInc.com.

Janet Lopez
Taylormade Properties, Inc.
(813) 855-5858
Since 1994 Taylormade Properties has provided the highest level of service to Westchase residents, whether buying, selling or leasing. Committed to quality service, we exceed your expectations.

Khaled Morad, Loan Officer
Goodwin Mortgage Group
(813) 470-0634
As your Westchase neighbors, we’re committed to educating and supporting you in the home buying and selling process. Call us today.

Gerald (Jerry) Pappa
Golf View Realty – Property Management
(813) 749-7930
“Your trusted property management partner in Tampa Bay.” Golf View Realty Property Management, now serving the entire Bay area. www.GolfViewTeam.com.

Kerry Planeta
RE/MAX Action First
(813) 817-5360
Multi-million dollar producer. Westchase resident since 2003. Expert negotiator and trusted professional with over 20 years of experience. Over $70 million sold. Call today!

Beau Ramirez, Realtor
Keller Williams
(813) 450-9229
As your Westchase neighbors, we’re committed to educating and supporting you in the home buying and selling process. Call us today.

Wendy Ross, Realtor®, Broker Associate, MCNE
Florida Executive Realty
(813) 493-9241; WendyRoss@TampaMarketHomes.com
Representing sellers and buyers throughout Tampa Bay for over fifteen years. Westchase resident since 2001 with an office next to the Westchase Golf Course. Learn about Wendy at TampaMarketHomes.com.

Amanda Siftar Group
Smith & Associates Real Estate
(813) 857-9093
Westchase resident since 2004. #1 Realtor® in 33626 in 2019 and 2020. Over 200 homes sold in 33626.

Smith & Associates Real Estate
(813) 570-7777
For more than 50 years Smith & Associates Real Estate has helped move Tampa Bay forward, connecting buyers and sellers with the right properties.

Alisha Stockton
Charles Rutenberg Realty, Inc.
(813) 732-5851
Top producing agent for over 18+ years in Westchase and the greater Tampa Bay area! Specializing in residential real estate, investments and rentals! www.AlishaStockton.com

Christine Sullo
Smith & Associates Real Estate
(303) 710-1029
Tampa Realtor® providing personal attention and dedication to all phases of real estate. Westchase neighborhood enthusiast, local property expert, “Helping Find Sanctuary”

Title Insights, LLC
(813) 336-4699
Let our 65 years of combined experience provide creative solutions for your unique closing circumstances on residential and commercial properties. www.YourTitleSource.com

The Wood Team, Doug & Nancy Wood
Smith & Associates Real Estate
(813) 957-3941; thewoodteam@smithandassociates.com
Full-Time Realtors®, serving Westchase since 2005. Visit us at 10714 Countryway Blvd., Tampa, 33626. www.thewoodteamtampabay.com

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