Tampa Bay Real Estate Growth

Tampa Bay Real Estate Growth cover picture shows a mid century modern home being built. Shows the concrete block without a roof.

Tampa Bay Real Estate Growth: Top Economic Growth Powerhouse

In a resounding testament to the region’s economic vitality, a recent groundbreaking study has revealed that the St. Pete-Tampa-Clearwater metro area ranked as the 8th fastest growing metro in the entire country by the end of 2023. This remarkable achievement, conducted and compiled by Chmura Analytics and the Area Development Research Desk, serves as a beacon of hope for the Tampa Bay area’s flourishing local economies and solidifies its status as a true economic growth powerhouse.

Tampa Bay Real Estate Growth: The Unparalleled Rise of Tampa Bay: A Closer Look

What sets this study apart is its meticulous approach, measuring data over a five-year span to ensure longevity and to avoid any potential one-time blips or disruptions. The researchers emphasized that the key factors considered were the local gross domestic product and its trend, unemployment rates, job growth patterns, the alignment between employer needs and the labor market offerings, and the activity in high-tech manufacturing, research and development (R&D), and occupations linked to science, technology, engineering, and math (STEM).

Remarkably, one of the primary drivers propelling Tampa Bay’s meteoric rise is the explosive growth within the tech sector. St. Petersburg, Tampa, and Clearwater have all witnessed a remarkable expansion in the tech industry over the last few years, cementing the area’s position as a hub for innovation and technological advancement.

Tampa Bay Real Estate Growth:  Impressive Rankings: A Reflection of Economic Strength

The St. Pete-Tampa-Clearwater metro area’s impressive rankings across multiple key categories serve as a testament to its economic prowess. Securing a top 25 ranking for economic strength (7th), core economic indicators (8th), and prime workforce (22nd), the area has demonstrated its ability to attract and retain top talent while fostering a conducive environment for businesses to thrive.

Moreover, the region’s workforce readiness ranked 26th in the country, showcasing its commitment to developing a skilled and adaptable labor force. Even in the areas of job growth indicators and wage and salary growth, the Tampa Bay area held its ground, ranking 31st and 49th respectively out of 384 metro areas evaluated in the study.

Tampa Bay Real Estate Growth:  The Secret to Success: A Flourishing Future

As the secret of Tampa Bay’s economic allure spreads nationwide, the region’s future growth prospects continue to soar. The Tampa-St. Petersburg-Clearwater metro area’s 8th place ranking by Area Development in its list of economic growth hotspots further solidifies its position as a destination of choice for businesses and investors alike.

Part of the optimism surrounding Tampa Bay’s future growth stems from its robust housing market. Tampa ranked 10th among Zillow’s hottest housing markets of 2024, having previously secured the top spot on the same list in 2022. This housing market momentum is fueled by the influx of new residents and businesses, as well as the area’s affordability compared to other major metropolitan regions, creating a self-sustaining cycle of growth and opportunity.

Tampa Bay Real Estate Growth:  A Balanced Blend of Opportunity and Quality of Life

While Tampa Bay’s economic prowess is undeniable, the region’s appeal extends far beyond its financial success. Tampa and St. Petersburg have both earned recognition as among the most fun cities in the country, based on factors such as nightlife, entertainment options, and a thriving culinary scene. Tampa’s ranking as the 6th best foodie city further underscores the area’s vibrant lifestyle and cultural offerings.

Notably, St. Petersburg, affectionately known as “The Burg,” has garnered praise as one of the happiest places in the United States, thanks to its abundant natural beauty, thriving arts and culture scene, and its status as a trending destination according to TripAdvisor.

Tampa Bay Real Estate Growth:  A Hub for Talent and Innovation

The Tampa Bay area’s remarkable economic growth can be attributed, in part, to its ability to attract and retain top talent from across the nation and around the world. The region’s universities and educational institutions play a crucial role in cultivating a skilled and innovative workforce, providing a steady pipeline of graduates in fields such as technology, healthcare, and finance.

Furthermore, the area’s commitment to fostering a supportive environment for entrepreneurs and startups has contributed to its emergence as a hub for innovation. Numerous incubators, accelerators, and co-working spaces have sprung up throughout the region, providing resources and mentorship to help turn ideas into successful businesses.

This vibrant ecosystem of talent, education, and entrepreneurship has created a self-sustaining cycle of growth and opportunity, drawing in new businesses and investment while nurturing homegrown talent and innovation.

Tampa Bay Real Estate Growth:  The Rise of Build-to-Rent Homes in Tampa Bay

Amidst the Tampa Bay area’s remarkable economic growth, a new trend has emerged – the proliferation of build-to-rent homes. In fact, a recent study conducted by Yardi-Matrix for RentCafe found that Tampa Bay ranks an impressive 6th in the nation for the number of build-to-rent homes under construction, with approximately 1,400 houses in the pipeline. Consequently, the area is currently producing these homes at a record pace, with a staggering 156% increase in the last five years, equating to 1,374 units.

Tampa Bay Real Estate Growth:  The Appeal of Build-to-Rent Homes

According to Doug Ressler, a Yardi-Matrix Business Intelligence Analyst, build-to-rent homes offer a unique value proposition: “It’s still a rental. It looks like a house, though. Usually, they start out about 1400 square feet. They have a very good price point so that people who cannot afford homes or cannot find homes because of the lack of affordable supply, which continues to erode in the US, they have an opportunity now to rent in something that looks like a home.”

Moreover, the area between Tampa and Orlando is witnessing a significant boom in build-to-rent homes, with Yardi-Matrix even referring to the market as “Orlampa.” This trend highlights the growing demand for alternative housing options in the region.

Tampa Bay Real Estate Growth:  Addressing the Affordable Housing Crisis

However, despite the proliferation of build-to-rent homes, the issue of affordable housing remains a pressing concern in Tampa Bay. In fact, the latest inflation data reveals that the cost of housing is only going up, increasing by 0.6 percent from April to May, with prices now 8 percent higher than they were a year ago.

William Kilgore, an organizer with the St. Petersburg Tenant’s Union, expressed concern over the worsening situation: “Things have gotten a lot worse. Rents have just continued to climb. People have continued to get evicted and become homeless, and it’s a big problem.”

Furthermore, St. Petersburg, Tampa, and Orlando now rank as the 34th, 35th, and 36th least affordable housing markets in the U.S., according to RealityHop’s housing index published in May. Additionally, a staggering 15,000 people are waitlisted for affordable housing or Section 8 vouchers in Tampa, while 10,000 people are waitlisted in St. Petersburg.

Tampa Bay Real Estate Growth:  The Need for Responsible Housing Solutions

While build-to-rent homes offer a potential solution, Kilgore argues that they are not the answer to the affordable housing crisis because corporate landlords control the rents. “The biggest problem is that these are owned by corporate landlords. This isn’t a good thing. We don’t want more corporate landlords in our community, who can just jack up the rent and not give any consideration to their tenants, not give their tenants any sort of democratic say or control over the living space over their heads,” he exclaimed.

Instead, Kilgore suggested that cities and states should own and operate more properties, ensuring accountability and rent control for residents. Furthermore, he emphasized the need for closer monitoring of vacancy rates, stating that the tenant’s union is finding that even though St. Petersburg’s vacancy rate is nearly double the country’s average vacancy rate – close to 19%, many units are Airbnb’s or apartments that allow people to pay nightly rates.

Tampa Bay Real Estate Growth:  Addressing the Housing Crisis with Comprehensive Solutions

In recognition of the affordable housing crisis, Governor Ron DeSantis signed the Live Local Act in March, investing $711 million into programs aimed at expanding the availability of housing and downpayment assistance – the largest housing investment in Florida’s history. However, as the Tampa Bay area continues to grow and attract new residents, it is evident that a multifaceted approach is needed to address the housing challenges.

By fostering collaboration between the public and private sectors, promoting responsible development, and implementing policies that prioritize affordability and accessibility, the Tampa Bay area can pave the way for a future where economic growth and quality of life coexist harmoniously, ensuring that the region’s prosperity benefits all its residents.

Tampa Bay Real Estate Growth:  A Booming Residential Construction Landscape

The Tampa Bay area’s growth extends far beyond its economic prowess and thriving job market. The region’s residential construction sector is experiencing an unprecedented boom, fueled by the influx of new residents and businesses. According to data from real estate software company Point2 Homes, Florida ranks second in the country with more than 212,000 building permits issued in 2022, a staggering 38% increase since 2019.

St. Petersburg, in particular, stands out as a shining example of this construction frenzy. Don Tyre, the city’s building official, confirms the record-breaking growth, stating, “Our last year, record year, we were 30% higher than the previous year. It’s all aspects; it’s not just the high rises, it’s multifamily, single family, businesses, a lot of renovations. You know, a lot of St Pete is redevelopment, you know, because we don’t have a lot of vacant land; a lot of it is tear down and rebuild.”

One of the most ambitious projects underway is the Residences at 400 Central, set to become the Gulf Coast’s tallest high-rise. Chris Lewis, the project executive with Suffolk Construction, provides insight into the massive undertaking: “A residential high rise 46 stories, 301 condos. We are currently at the foundation phase. What you see behind me is the matte foundation; it essentially becomes a big solid mass of concrete that becomes the foundation for the superstructure.”

Tampa Bay Real Estate Growth:  Building Permits Surge

The city’s data reveals a surge in building permits, with over 34,000 issued in 2018 and 2019, followed by a dip in 2020 due to the pandemic. However, the momentum quickly rebounded, with 34,200 permits issued in 2021 and a staggering 36,800 in 2022. The first four months of 2023 have already seen 16,500 permits issued, highlighting the insatiable demand for residential construction in the area.

Tyre acknowledges the strain on his staff, saying, “We have 12 plan review staff, 24 inspectors, and about 30 support staff and different roles. We are all doing overtime; they’re going out the door with 20 inspections a day.”

Doug Ressler, Business Intelligence for Yardi, the parent company of Point2 Homes, attributes the influx to Florida’s attractive taxation policies and strong job market. “All different demographic classes are coming to the Florida area. One of the big reasons is for taxation… and also the job market is very strong,” he explains.

The study found that nearly 1.7 million permits were issued nationwide in 2022, with Texas, Florida, and California accounting for more than one-third of the total. In Florida alone, 212,206 residential building permits were issued, including 4,500 for two to four-unit buildings, 74,000 for five or more unit buildings, and 134,000 for single-unit buildings.

Tampa Bay Real Estate Growth:  Small home trend

Ressler notes the trend towards smaller homes to meet the demand for affordability, stating, “A lot of the reason for that is for the affordability. If I’m going to build a house, I’m going to try and build to the demand, but also, I want to minimize my costs. So what you’ll see is smaller homes being built.”

The Tampa Bay metro area has experienced one of the biggest year-over-year increases in the number of permits, with a 21% surge in 2022 compared to 2021, reaching nearly 30,000 permits. It closely trails the Orlando-Kissimmee metro area but stands in stark contrast to the Miami-Fort Lauderdale region, which saw a 22% decrease in permitting.

Florida also leads the way for medium-size metro areas, with North Port-Sarasota-Bradenton, Cape Coral-Fort Myers, and Lakeland-Winter Haven topping the list for permitting.

To accommodate the record growth, St. Petersburg even had to reduce permit fees, as the building department’s revenue exceeded the allowable reserves. “We had a little bit too much money in our overall cap, and you’re only allowed to carry the average of the last four years’ operating expenses as a reserve. So we reduced the fees for 25% because it was record construction,” explains Tyre.

Tampa Bay Real Estate Growth:  Beyond St Pete

As Lewis attests, the construction boom extends beyond St. Petersburg, with Suffolk Construction alone managing about 25 projects across the Sunshine State, primarily high-rise residential buildings. “There is such a huge demand for these buildings and people moving into the state of Florida from elsewhere. It’s a great thing for Florida. And it’s a great thing for the construction market,” he says.

With the Tampa Bay area’s economic growth, job opportunities, and desirable lifestyle attracting residents from across the country and beyond, the residential construction sector is continuing its upward trajectory, reshaping the region’s skyline and accommodating the influx of new residents seeking to call this thriving metropolis home.

Tampa Bay Real Estate Growth:  A Promising Future Beckons

The Tampa Bay area’s future looks exceptionally bright, with its thriving economic growth, driven by the booming tech sector and favorable conditions for businesses, poised to continue attracting talent and investment. Simultaneously, the area’s vibrant lifestyle and culinary offerings, coupled with its natural beauty and coastal charm, make it an appealing destination for residents and visitors alike.

As the Tampa Bay area continues to garner national recognition for its remarkable economic growth and overall appeal, it is evident that the secret of its allure is out of the bag. The region’s harmonious blend of economic opportunities and a high quality of life has transformed it into a true gem, attracting individuals and businesses from across the country and beyond.

Tampa Bay Real Estate Growth:  Conclusion

In conclusion, the Tampa Bay area stands as a shining example of a region that has successfully balanced economic prosperity with a vibrant and fulfilling lifestyle. Its rapid growth and impressive rankings across various sectors, particularly its recognition as the 8th fastest growing metro in the country, serve as a testament to its appeal and potential. As the area continues to thrive and garner well-deserved attention, it is clear that the future holds countless opportunities for those who embrace the unique charm and dynamism of the Tampa Bay region.

If you are looking for a St Petersburg Real Estate Agent visit https://avalongrouptampabay.com/

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About the Author
Rob Johnson
Realtor, St. Petersburg FL