If you’re a real estate investor in the Tampa Bay area, you have no doubt been following the effects of the COVID-19 pandemic on the property market. While the crisis has certainly made a huge impact on the real estate industry, particularly on the commercial real estate sector, there are still plenty of reasons to be optimistic. For years, the Tampa Bay area has been a leader in investment properties. So far, many signs indicate that this will remain unchanged for 2020.
Here are some reasons why investors should remain confident about their prospects in the area despite the pandemic:
- The residential rental market remains strong
- Growth in Tampa Bay’s housing market is sustainable
- There’s a growing demand for real estate in lower density communities
- Industrial properties are booming
As expected, the unemployment rate in Tampa Bay has risen in the last few months, largely because of losses in the retail and hospitality sector. However, the metro’s economy is not reliant on this sector alone. Tampa Bay is home to several Fortune 500 companies and other industries that still thrive even in these times. Healthcare and financial services, for example, have made a significant impact on the local economy, ensuring the continuity of jobs and incomes.
As such, the area remains a desirable destination for migrants looking for job opportunities. As a rule, new residents choose to rent, at least in the first few years of moving. Around 53% of Tampa Bay residents are renters, so this means rental properties will likely remain highly viable investment options here.
Despite the pandemic — or perhaps even because of it — the housing market in Tampa Bay has continued to do well. According to RealtyHop’s July, 2020 report, Tampa remains one of the hottest housing markets in the country, ranking #45 out of 100 of the largest markets in the US. While home prices were down around 2.64%, total sales as of the end of the month was higher compared to the same period last year.
Before the pandemic, the market has seen consistent growth since 2000, with a 139% increase in home values between 2000 and 2019. In July this year, Zillow tagged the Tampa market as “very hot”, with a median home value that’s higher than the Tampa-St. Petersburg-Clearwater metro values.
Master planned communities have also registered strong sales despite the crisis, with two Tampa Bay communities — Lakewood Ranch in Sarasota and Wellen Park in Venice — making it to the top three communities for sales in the first half of 2020. Developers continue to invest strongly in the metro, with new communities being planned or currently under construction.
All around the country, there has been a noticeable increase in relocations from high density urban areas to less crowded communities, as people look to live in places that are more ideal for sheltering in place and are considered safer from disease outbreaks. As previously mentioned, strong home sales have also been recorded in Tampa Bay’s master planned communities in light of the outbreak, reflecting people’s desire for bigger living spaces and relative isolation.
A recent report by Redfin ranks Tampa as one the top 10 cities people are moving into during the pandemic, based on the inflow vs. outflow of residents. Around 3,745 have moved into the city between April and May this year, and more than half of searches for homes in the city are coming from outside the metro. On the other hand, cities with high densities like New York, San Francisco, and Los Angeles, top the list of areas with the biggest outflows.
Luxury NYC home buyers have also shown increased interest in Tampa properties, particularly in expansive single-family homes that can make quarantine more tolerable.
The bright spot in Tampa Bay’s commercial real estate sector is industrial real estate. While the vacancy rate increased to 6.6% by the end of June, 2020, this is largely attributed to the increase in supply over the past year, with an additional 1.5 million square feet added in the first half of 2020 alone. Over the last five years, around 7.9 million square feet of industrial space were added in the area.
Warehouse/distribution made up 88% of all activity in the metro’s industrial real estate sector in the first half of the year. Three prominent transactions involving more than 250,000 square feet each contributed to positive absorption levels in the last three months — Ace Hardware in Plant City, and Amazon and Refrasco on the Eastside. These new deals are seen as a direct result of increasing e-commerce activity throughout the country, necessitating additional warehouse and fulfillment spaces.
While the situation around the country remains highly fluid, there are many indications that the Tampa Bay real estate market will continue to remain strong and surpass the crisis.
When investing in the area, always get guidance from professionals who know the market inside and out. The team at Viewpoint International Realty have the expertise to help you with your investment needs. Give them a call at 727.584.7355 or send an email to viewpointrealtyinternational(at)gmail(dotted)com.