It's taken 40 years but the Tampa Bay area has finally been named one of the nation's top 10 markets for real estate investors.
And we're not talking just house flippers but also big-time investors prepared to sink millions into warehouses, office buildings, industrial space and shopping centers.
"The investment prospects are across all types of properties," said Mitch Roschelle, a partner at PwC US and co-author of Emerging Trends in Real Estate 2019. "What Tampa (Bay) has in common with other top 10 cities is that its employment base is growing, its population is growing and the result is an engine for continued economic prosperity."
For the past four decades, PwC US and the Urban Land Institute have collaborated on an annual survey of real estate professionals around the globe. This year they queried 2,400 pros, who ranked Tampa Bay 10th among 79 U.S. metro areas in overall real estate prospects. And it ranked second in home building, surpassed only by Nashville.
What makes the bay area so attractive? One big reason is that housing is a relative bargain, with a median home price of $227,000 compared to $262,000 nationally.
"In a period of tight labor markets, employers tend to gravitate to where workers can live affordably," Roschelle said in a phone interview this week. "When you have 3.7 percent unemployment (nationally), jobs chase people versus the other way around. Tampa is enjoying the benefits of the fact there is an employment base that wants to be there because it's affordable."
Also key to the bay area's investment appeal: a population increasing by about 1.3 percent a year, almost twice the national rate.
Not surprisingly, all those new residents have pushed Tampa Bay into the No. 2 spot for homebuilding, whether by a big "publicly traded builder or a small entrepreneur building its first spec homes," Roschelle said. "What's driving that is the fact home prices are considerably more affordable than nationally and that Florida is favorable from a tax perspective relative to New York, where I live."
Most of the markets that made the list of best places to invest in 2019 are smaller metro areas. That is not surprising either, Roschelle says.
"The entry point is lower; they are affordable to invest in,'' he said. "We are in a virtuous cycle — when you have cities that are affordable to do business in and live in, they tend to prosper because more people and more companies want to go there."
One downside of continued growth is traffic congestion, which could become an even bigger headache in the Tampa Bay area with no rapid transit options in the foreseeable future. Roschelle notes that traffic between Fort Lauderdale and Miami is so "horrendous" that more people are choosing to work in their home county rather than commute.
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"Down the road, companies will find themselves locating where people live as opposed to where companies think they should be,'' he said. "If you go down I-75, you'll find that markets like Sarasota are growing their office stock because more people are opting to stay there and work down there."
Other trends cited by the report:
• Retail space gets a new lease on life. With low prices, it's a good time to repurpose such space for urgent care clinics, health and fitness centers, financial services and entertainment venues.
• Amenities go wild. New office buildings and apartments communities will include child and pet care, bike storage and even fruit and vegetable gardens.
• 18-hour suburbs grow. The generation that drove the urbanization trend and 18-hour cities might finally be ready to move to "the 'burbs.'' But millennials will still be looking for urban amenities like walkable neighborhoods and proximity to shopping and entertainment.
Contact Susan Taylor Martin at firstname.lastname@example.org or (727) 893-8642. Follow @susanskate