Foreclosures, however, are down. Mortgage moratoriums providing protection against foreclosure of FHA-insured loans means many lenders and servicers are unable to initiate foreclosure at the present moment. However, once certain protections expire, it’s likely the foreclosure start rate will increase in the near future.
The Tampa market is supported by a variety of economies and industries largely because of location, having ample access to ship and receive goods from its international airport or port.
Military and Defense: St. Petersburg, Tampa, and Clearwater are home to several military bases, including the MacDill Air Force Base and Coast Guard Air Station in Clearwater, in addition to being home to several Raytheon, GE, and Lockheed facilities.
Tourism: Tourism continues to be a mainstay for the state. St. Petersburg and Clearwater have world-renowned beaches, driving visitors from all over the world, which in turn drives retail sales and business in the hotel and restaurant industry. The greater Tampa area is home to several famous tourist attractions, including the Gasparilla Pirate Fest, Busch Gardens, Salvador Dali Museum, Florida Aquarium, Florida Holocaust Museum, Lowry Park Zoo, and Weeki Wachee Springs State Park and has a budding food and brewery scene. It’s estimated that Tampa’s tourism brought in $6.9 billion in revenues in 2019.
Financial & technology services: Many financial institutions and tech companies, including the cybersecurity sector, use Tampa Bay as their hub or headquarters in the South. TransferWise, Raymond James Financial (NYSE: RJF), and USAA all call Tampa home. In fact, 3.9% of all jobs in Tampa are in the tech industry, which falls in line with New York City, Pittsburgh, and Philadelphia. Cybersecurity, however, has become the top tech-driven business in the area.
Manufacturing and Corporate Headquarters: Tampa is home to several large companies headquarters or manufacturing facilities, including Johnson & Johnson (NYSE: JNJ), Pfizer (NYSE: PFE), Coca-Cola Beverages (NYSE: KO), Honeywell International Inc. (NYSE: HON), General Electric Company (NYSE: GE), Bausch & Lomb (NYSE: BHC), and Suzuki Motor of America, Inc.
Healthcare: The healthcare industry is an essential industry for the Tampa market, providing 67,000 jobs in the St. Petersburg and Clearwater markets, while the city of Tampa is home to over 20 hospitals, 22% of the state’s pharmaceutical and medicine manufacturing workforce, and 14% of biotech companies for the state.
Schools of note
The University of South Florida in Tampa is by far the largest university in the greater Tampa Bay area. With the main campus located in North Tampa and a tertiary campus in St. Petersburg’s downtown, the university serves more than 50,000 students. Gulfport, a small city located next to St. Petersburg, is home to Stetson Law School, a rather prestigious law school that serves around 4,000 students annually. Additionally, there are two smaller private colleges, including the University of Tampa and Eckerd College, that serve under 12,000 students combined.
Neighborhoods of note
When it comes to neighborhoods, there are several notable areas that have a lot of fix-and-flip activity, as well as high demand for residential sales and rental properties. Below are a few of the most up-and-coming or high-demand markets that show steady historical growth and demand.
Temple Terrace and University Square
The neighborhoods of Temple Terrace and University Square capitalize on the need for student housing. Located by the University of South Florida, these neighborhoods are often affordable options for students to rent single-family or small multifamily homes (such as a duplex, triplex, or fourplex).
University Square is becoming a hot spot for fix-and-flip investors and long-term landlords. With housing prices starting in the low $100’s ranging to the low $200’s once repaired, it’s a prime price point for a solid return on investment as a rental. Temple Terrace has a mix of permanent residents and tenants, with homes starting in the low $100’s to the high range of $400,000, making it an ideal location for fix-and-flip or long-term rentals.
Many of the neighborhoods surrounding Tampa’s downtown are split between historically blighted neighborhoods currently undergoing redevelopment and revitalization (like Ybor, Seminole Heights, and Tampa Heights) or pricey neighborhoods (like Hyde Park or Old West Tampa) well established in prestige, demand, and amenities. There are few neighborhoods that fall in between these, but it seems East Tampa is the closest match.
With still fairly low starting points for homes ranging from the low $100’s to low $300’s, and rents in the $1,400 – $1,600 range, investors can still find worthwhile opportunities. Investors also have the benefit of having slightly newer homes in comparison to the nearby neighborhoods, which means you don’t have to deal with historical societies when it comes time to renovating.
There is only so much land on a peninsula. One of St. Petersburg’s biggest struggles is utilizing land to meet housing needs. Many of the surrounding neighborhoods, including Kenwood and Old Northeast, have priced out most investors despite an increased demand for both fix-and-flips and rentals in those markets. However, nearby Disston Heights still remains off many investors’ radars. It’s still relatively close to much of St. Pete’s trendy downtown and central district bars, shops, and restaurants without the high home prices. Home prices start in the low $200’s, making their way into the low $400’s, with rents running in the mid $1,500 – $1,900 range, making it a well-priced market to jump into.
Gulfport is its own city, bordering St. Petersburg on one side and the gulf on the other. This eclectic and small city continues to hold reliable opportunities for investors because of its mix of residents. The city is home to several diverse mini neighborhoods with its own small historic downtown waterfront lined with bars, shops, and restaurants. Certain parts of the city lend itself more naturally to rental homes, particularly with the nearby Stetson Law School, while others are ideal for fix-and-flip opportunities since the city lends itself to both homeowners and tenants equally.
The Millionacres bottom line
As with many other real estate markets, investing in the greater Tampa Bay area can be a potentially lucrative move. It’s simply a matter of understanding which neighborhoods, industries, and investment avenues present the best opportunities in the present moment. Economy and industry are thriving and it seems more and more businesses are driving demand to this area. However, its unique geographic makeup, particularly St. Petersburg and Clearwater, means land is in short supply, which will likely continue to drive real estate prices up as demand continues to flow in. Investors need to be mindful of these price variations as well as the supply and demand to ensure the market is in favor of their investment strategy.