Tampa’s housing market is white-hot
Author: Brian Boucher
You know your city’s housing market has arrived when it is the subject of its own cheesy Netflix reality show.
“Selling Tampa” highlights the escapades of the luxury real estate firm Allure Realty and its founder, former U.S. Army paratrooper Sharelle Rosado. Launched in December, the series (a spinoff from “Selling Sunset,” which highlights Los Angeles) introduces the mostly-minority, all-woman team, adding empowerment in with the drama around the sales of multimillion-dollar homes in Tampa, Fla. and the lavish commissions they generate.
And no wonder — even if all the homes aren’t selling in the same eight-figure range as the ones handled by Allure Realty, this Florida city on the Gulf of Mexico coast has earned the spotlight. Home values increased 28.7 precent year-over-year by October 2021, and in both September and October, Zillow reported that homes spent a median of just six days on the market.
While Derek Jeter, Tom Brady and Tom Cruise may all own homes here, there’s still plenty of room for mere mortals, with the average Tampa Bay home valued at $316,379, according to Zillow.
“It’s been crazier than most,” says Moody’s economist Emily Mandel of Tampa’s real estate market, quite a claim when some markets nationwide — like Phoenix and Austin — have seen growth rates pushing near 20 percent year over year.
Even if the market is cooling, in line with seasonal normalization in many other markets, Bryan Waters, a broker for Mynd in St. Petersburg, says it has gone from “super burning hot” to “just super hot."
There are a lot of buyers, including investors and institutional buyers, and people moving to Tampa from places like Boston, New York, and Chicago, according to Waters. With many folks stuck at home, in Tampa they can afford more space and can go outside year-round.
“It’s tough to find deals, it’s such a seller’s market,” he says. “Things can be off the market within 24 hours.”
Tampa’s post-pandemic real estate recovery
Many cities in Florida have taken a hit during pandemic lockdowns, which have seen travel and tourism plummet. But Tampa’s real estate market made quite a comeback.
“Tampa, especially its recovery from the pandemic’s effects, is a success story,” says Mandel. “Employment is fully recovered, and the labor force has rebounded really strongly. In a recent report looking at the country’s top 25 metros and how far above pre-pandemic levels they are, Tampa was only behind Austin, Texas.”
That’s partly because its economy is less dependent on tourism than, say, Orlando, its neighbor to the east.
“The city has one of the most diverse economies in Florida,” says Mandel. A number of Fortune 500 companies are located in the area, including Publix Supermarkets, electronics wholesaler Tech Data Corp., tech manufacturer Jabil Inc., WellCare Health Plans, Raymond James Financial, and casual dining company Bloomin’ Brands (which owns Outback Steakhouse and Bonefish Grill).
Partly due to its major port, the city is a regional trade and distribution center, and the economy is also bolstered by financial and insurance services, manufacturing, agriculture, tourism, and the presence at MacDill Air Force Base.
And there’s a new entry into that long roster of industries. Tampa’s fast-growing tech scene is “punching above its weight,” Mandel says. “Tech firms have even been priced out of Denver, so they’ve gotten creative, even though Tampa isn’t the number one place that would come to mind for the industry.”
A Forbes report says the tech scene is “exploding” and that Tampa is positioned to become one of the tech capitals not only of Florida but of the South.
The city’s economy is growing, providing jobs and underpinning the demand in Tampa’s real estate and housing market. Its five-year projected population growth is some 161,800, or 1 percent, well above the national rate of 0.6 percent.
According to the Tampa Bay Economic Development Council, the area was ranked fifth in the nation for net migration in 2020, with nearly 42,000 new residents, or 115 every day. The Tampa-St. Petersburg-Clearwater metro area population is about 2.9 million, up from about 2.1 million at the turn of the millennium.
A recent study commissioned by the Tampa Hillsborough Expressway Authority predicts the population of Hillsborough County (of which Tampa is the seat) could grow up to 30 percent by 2040.
“The city’s growth has been quite strong,” says Mandel, “and I definitely envision it staying strong in the near term. It’s a place people want to live right now, and there has been good population growth from all sides. There are always people retiring there, but there has also been good growth in the prime age cohort, say from 25 to 44 years old, who are in their prime home buying age.”
So it might be time for St. Petersburg to retire its enduring sobriquet, “God’s waiting room.”
Tampa Bay attractions: winning sports teams and beaches
There are plenty of reasons for people to keep coming. Thrillist was raving about the food scene in 2018 — Tampa is, after all, the actual birthplace of the Cuban sandwich.
One very big sell is the white sand beaches of neighboring St. Petersburg and Clearwater, which regularly get high ratings on TripAdvisor. And there’s plenty of other fun to be had.
Locals call the area “Champa Bay” for its concentration of winning sports teams: the Tampa Bay Buccaneers won the 2002 and 2020 Super Bowls and have made 11 playoffs, while the Tampa Bay Rays baseball team are multiple World Series contenders.
But ice hockey may be the most popular in this subtropical metro; the Tampa Bay Lightning won the Stanley Cup in 2020, and the team averages among the highest attendance numbers among all National Hockey League teams
As for other tourist draws, Busch Gardens Tampa Bay draws millions every year, and visitors love the Florida Aquarium, the Museum of Science and Industry, and the Ybor City State Museum, which preserves the local history of the cigar trade.
People used to line up to visit the tigers, lynxes, and jaguars at Big Cat Rescue, the sanctuary run by Carole Baskin, until it closed to visitors due to bad press in the form of that other Netflix show, “Tiger King.”
Visitors can still take in St. Petersburg’s Salvador Dalí Museum, where 400,000 a year flock to see the creations of the Spanish Surrealist, the Master of the Melting Clocks. Those who want to get a Church of Scientology personality test for kicks can head to its global headquarters in Clearwater.
Locals can also be proud of some of the region’s infrastructure highlights; the Wall Street Journal ranked Tampa International Airport #1 among its peers in 2019; J.D. Power named it second-best for customer satisfaction among large airports in 2021, the fifth year the airport has been in the top five.
The area’s educational infrastructure is also outstanding. There are some 23 schools near Tampa, enrolling more than 110,000. The University of South Florida has risen in the US News and World Report ratings, moving from 94 to 46 among public universities and 67 spots among all universities (170 to 103), It currently ranks as one of the nation’s top 50 public universities.
Tampa’s aviation past and projected future growth
Tampa’s background mixes agriculture, military concerns and a curious landmark in aviation history. While the city’s name is of uncertain origin, it might be a Creek word for “a nearby place,” as in by the Bay.
Originally inhabited by Calusa and Timucua peoples, the region was later home to Fort Brooke, an 1824 military post, and began to see new industries after the 1884 arrival of the South Florida Railroad. Spanish entrepreneur Vicente Martinez Ybor introduced cigar manufacturing to the region, and Ybor City became a worldwide center for the trade.
Though it lasted just four months, the world’s first scheduled passenger airline service, inaugurated in 1914, sprang up to connect Tampa and St. Petersburg (now just a half-hour apart on I-275).
Today, local citrus fruits, along with the phosphates that are a major industry, leave via the port at Tampa, while essentials like petroleum, coal and steel come into this regional trade and distribution center.
If there’s a worrisome factor weighing against Tampa’s long-term future, it’s one that many low-lying coastal cities worldwide will face: climate change and the rising sea levels that will result. Both Waters and Mandel factor it into their assessment of the city’s prospects.
“I definitely keep flood zones in mind,” says Waters. “If you have a mortgage, you need flood insurance, which is an additional expense. If there’s a hurricane, you’re more likely to get flooded. If the water rises, you’re more likely to get flooded. St. Petersburg does a great job, but there is a lot of developed land that’s under sea level. In the Shore Acres neighborhood, if it so much as sprinkles, it’s flooding. You just have to know that.”
All the same, experts are betting on the city’s future. No less a figure than Bill Gates is investing in the Water Street Tampa multi-use project, which includes the city’s first “true five-star luxury hotel,” the JW Marriott.
PriceWaterhouseCoopers and Urban Land Institute’s Emerging Trends in Real Estate 2022 report ranks the metro area #2 nationally among homebuilding prospects and #5 among overall real estate prospects, classifying it as a “magnet” (alongside cities like Phoenix and San Antonio) and giving multifamily properties a 57 percent “buy” and 24 percent “hold” rating.
Job growth is expected to be a bit better than the national figure, says the report, which indicates that about two-thirds of new building is expected to be single family homes, well above the national figure of 57.3 percent, leaving plenty of room for investors.
The city may also grow at such a rate that it may be part of a new phenomenon, a “megaregion,” with population projected to climb by 2025 to almost 25 percent higher than 2010 figures.
The future promises even better days, especially for those sassy entrepreneurs at Allure Realty. Long may they be, as they put it, “closing deals in heels.”
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