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The Tampa Bay Area, which encompasses three large cities in southwest Florida, is one vibrant market teeming with opportunities that real estate buyers wouldn’t want to miss. Whether you’re a property investor or an aspiring homeowner, this metropolitan area comprised of Tampa, St. Petersburg, and Clearwater, offers one huge fertile market to consider.
This vitality is but to be expected, because the dynamics of four counties—Hernando, Hillsborough, Pasco, and Pinellas—are actually at play in the fortunes of the Tampa market. Population growth and the many positive ripple effects it brings to the local economy accounts for much of the market excitement on this region.
Top 10 in Growth
In 2017, the U.S. Census Bureau reported that almost 55,000 new residents relocated to the Tampa Bay area. This turnover put the metropolis as the 10th highest city in terms of population growth nationwide.
The bureau’s 2017 census estimate reckoned the population of the Tampa Bay area at close to 3.1 million, up nearly 1.8 percent from the 2016 reading. This growth in new residents, at this pace, even moderated a bit, considering that the area posted the 7th biggest population increase among U.S. metros in 2016. From 2010 to 2020, projections show that the Tampa metro’s population will rise 10.5 percent to 3.07 million.
Graph of U.S. Census data by Tampa EDC
Significantly, international residential real estate activity is contributing to the surge of the growth of Tampa Bay area residents. According to the 2018 survey of the National Association of Realtors (NAR), this metro accounted for 9 percent of foreign buyers in all of Florida in 2017.
Tampa came second, next only to the Miami-Fort Lauderdale-West Palm Beach metro, in terms of international home buyers who chose Florida as their destination. Notably, too, Tampa attracted the whole mix of Florida’s foreign home buyers which include those from China, South America, the U.K., and Canada, the NAR study also showed.
Sustained Influx of New Residents
The good news here, especially for the players in the Tampa real estate market, is that the Tampa area could be expected to continue drawing more people domestically and internationally to its fold in the years ahead. Sean Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida (UCF), projected that the next wave of population growth in Florida to be more pronounced in the Tampa Bay area.
The UCF’s chief economist, in his institute’s annual outlook released September 2018, said a bigger share of the population gain is heading Tampa’s way. This trend in favor of the Tampa metro, Snaith said, is unlikely to be sidetracked easily or stopped altogether, as he noted that its chief destination rival—the Miami-Fort Lauderdale area—is already densely populated and is getting hemmed in more because of geography,
In contrast, the UCF economist said Florida now has its bread basket, as far as future growth is concerned, on the Interstate 4 corridor stretching from Tampa to Orlando and stretching to as far as Daytona Beach. “There is a lot of room to grow in all directions (along I-4) in terms of physical space,” Snaith was quoted in media as saying.
Encouraging Economic Data
The end-result, he added, will be relatively high economic growth rates for the Tampa area. These area gains, Snaith noted, which would include overall employment and per-capita income, would be better compared to the other metro areas of Florida.
Other think-tanks have offered favorable economic readings for the Tampa Bay Area. A research published recently by the Brookings Metropolitan Policy Program notably elevated Tampa to the top 20 of the best-performing U.S. metros. This study covering the 2010-2015 period placed the area at No. 18 for growth based on number of jobs and on gross metropolitan product. Significantly, too, Tampa was at No. 17 in terms of inclusion, a measure indicating employment changes and income distribution, according to Brookings’ Metro Monitor.
As pleasing for potential international home buyers, Tampa likewise emerged prominent in the 2018 Global Metro Monitor of Brookings. With its increased output in gross domestic output per capita, Tampa rose 120 rungs up the ladder in the top 300 expanding metro areas worldwide. From No. 267 in the previous 2000‒2016 Brookings study, Tampa jumped to No. 146, as per Brookings’ most recent international comparisons. This research indicated that since 2014, the Tampa area’s GDP has risen 1.4 percent while employment has gained 3.4 percent.
Quantifying this growth, the research firm IHS Markit has separately estimated the total Tampa Bay area’s economic output at $148.6 billion in 2017. This performance, which was presented in the Metro Economies report for the U.S. Conference of Mayors in 2018, put Tampa in the top 25 Metro areas across the U.S. For the whole of Florida, Tampa was at second place next only to Miami but still ahead of the surging Orlando metro. Moving forward 2019 and 2020, Tampa is expected to generate a 3.1 percent economic growth rate and a 2.1 percent gain for job growth, this research from IHS Markit also indicated.
At this juncture, let’s take a look at the major forces which are driving the Tampa Bay Area’s economic growth. Specifically, these economic drivers include the following:
Hospitable business climate
Tampa provides a stable, pro-business environment. The factors contributing to this healthy setup include cost of doing business competitive with other metros, generous local tax incentives, lighter regulatory burdens, and a streamlined processes for business registrations, licensing and permits.
Given these perks, 19 corporate headquarters generating annual revenue of over $1 billion have Tampa as their base. The top companies the region hosts include Amazon, Amgen, Bristol-Myers Squibb, Citigroup, Depository Trust and Clearing Corporation, IRONMAN, The Mosaic Company, and USAA. In addition, nearly 500 foreign-owned companies from over 40 countries have presence in this metro.
Deep Pool of Talents
Tampa, population hub for a multi-county region, boasts of an active workforce of 1.97 million, with 37 as media age. Aside from relatively young, this metro’s labor force consists of talented and highly educated individuals benefiting from the strength of the academe in Tampa.
Tampa boasts of a strong base for higher education that includes the University of South Florida, among the top 50 research university in the U.S. Likewise a prime workforce contributor, the University of Tampa is on the list of Forbes magazine’s “America’s Best Colleges.”
Valuable human resources are also molded at the metro’s Saint Leo University, one of the military’s top 10 destinations for higher education. Another academic asset in Tampa, the Hillsborough Community College offers two-year development programs to quickly address local workforce gaps.
The Tampa Bay Area offers diverse ways for businesses to link with their markets and consumers. This Metro is host to the country’s second highest rated airport. It provides an extensive highway and rail network, as well as the state’s largest and most diversified port.
The flat topography of the Tampa region works to its advantage too. This helps keep costs of distribution relatively lower than those regions with more hilly terrain. Moreover, formation of sinkholes, which is prevalent in the state of Florida, has been well studied in the Tampa Bay area. Reliable maps on local sinkholes or where these could potentially occur have already been produced and readily available.
In addition, Tampa is host to the highest number of certified LAN installers in the U.S. The Metro’s business locators and local entrepreneurs can always stay connected efficiently with their customers and business partners.
The Tampa Bay Area provides the right work‒life balance conducive for both businesses and residential communities. The cost of living in the metro is more affordable compared to most major urban centers, but offering the same high quality of life. The amenities that the area provides are top of the line. These include some of the most beautiful residential communities in the country, Florida’s leading healthcare services state, and a collection of America’s best high schools.
Tampa has something for everyone, enabling choices of top-rated restaurants, eclectic art and music festivals, sports events, outdoor activities alongside beaches and crystal blue waters. The metro, with all these offerings, have been cited as a most-livable city as well as a city where a staycation comes best.
Impetus of New Property Developments
New residential and commercial property developments are likewise engines of growth for the Tampa Bay Area. Several national builders, including Lennar Homes, D.R. Horton, and M/I Homes, have acquired large parcels of land in and around the metro’s major population centers.
As a result, amenity-rich suburban living is now available in thriving residential communities like FishHawk Ranch, Magnolia Park, and Waterset. Tampa’s central downtown is an epicenter of new developments, too, with population growth driving developers to launch new residential projects in surrounding districts. Some of the places benefitting from this are Tampa Heights, Ybor City, Channelside, Hyde Park, and Harbour Island.
Tailwinds for Real Estate
For certain, the economic drivers previously cited have provided steam to the real estate market activity in the Tampa Bay Metro. Sales of single family homes in this area rose a marginal 0.1 percent to 48,162 units in 2018, the most number of closed deals in the state. Median sales price, on the other hand, increased 6.8 percent to $235,000, which is more moderate compared to the 7.2 percent pace for all of Florida.
2018 Single Family Homes Market Data*
|State/Metro Area||Closed Sales||Y/Y % Change||Median Sale Price||Y/Y % Change|
|State of Florida||277,835||2.2%||$254,500||7.2%|
Source: Florida Realtors®
The median price of condos and townhouses in Tampa Bay increased at a more moderate clip too at 6.7 percent to $160,000. Total sales for these residential types in the metro during 2018 amounted to 16,971, a fractional drop of 0.9 percent from. But still, this sales volume compared to other Florida metros came out as second only to the Miami metro area.
2018 Townhouses/Condo Market Data*
|State/Metro Area||Closed Sales||Y/Y % Change||Median Sale Price||Y/Y % Change|
|State of Florida||116,637||4.8%||$185,000||7.2%|
*Source: Florida Realtors®
Inventory for both single family homes and condos in Tampa has been estimated at around a 3-month supply. At this level, the metro’s residential property market is well within sellers’ territory. This considering that 5 months is the industry benchmark for a market equilibrium wherein neither buyer nor seller has the advantage in pricing.
Be that as it may, most realtors in the Tampa market territory expect home price growth to remain moderate this 2019. The increasing number of new home construction expected to come in should help temper a dramatic acceleration of prices, a trend that should further whet buying interest on Tampa’s residential properties.
Summing it all up, the real estate market of the Tampa metro area appears on an upward trajectory, as robust growth in population continues to spur demand for housing. As a consequence also of the sustained influx of new residents, we can expect to see more business enterprises being drawn to this region, further contributing to the growth dynamics of the entire metro area.