Why do some Tampa Bay waterfront homes sell for millions only to get torn down?

Forget stunning mansions with waterfront views of Tampa Bay. Empty parcels of land are the hottest deals in town right now.

Vacant lots in waterfront neighborhoods are quite rare — especially in Pinellas, one of the most densely developed counties in Florida — and buyers are willing to pay a lot more for a blank slate over a ready-to-move-in home, Realtors say.

That’s why agents are noticing a trend of older waterfront mansions being torn down. Then the property is sold at a premium to a buyer looking to build something more modern from scratch.

For example, the Richard W. Strefling Revocable Trust bought four properties on Snell Isle’s Bay Point Drive between 2017 and 2021, according to county records. Strefling was the president of Dynamax, an RV and motorhome manufacturer that was acquired in 2011 by a subsidiary of Warren E. Buffett’s Berkshire Hathaway.

The parcels went for top-dollar amounts, with sales ranging between $2 million to $5.5 million. Two of the houses have been demolished.

The two homes torn down were originally sold for a combined $5.4 million. Now the two lots are vacant and the 31,000 square feet are listed as one for nearly $17 million through Premier Sotheby’s International Realty.

That’s a 200 percent increase from the original value if sold at the listed price. It could also be one of the most expensive residential sales in the Tampa Bay area so far this year — worth even more than Tampa Bay Lightning captain Steven Stamkos’ Tampa home, which sold for $16 million.

“This rare opportunity is for that special buyer searching for the ultimate trophy land on which to build an extraordinary home,” describes the online listing. “It has breathtaking unobstructed views.”

The trend of buying up vacant lots is happening all over Florida, especially around Palm Beach County, said Robyn Gunn, the Sotheby’s agent representing the Snell Isle lot. Now prospective buyers are looking closer at the Gulf Coast and finding good value on the market, she said.

Property prices skyrocketed during the pandemic because of an inventory shortage and a number of buyers coming in from out of state. Take Derek Jeter’s Tampa home, for example, which sold for a record $22.5 million. With a shortage of houses available, some buyers are willing to pay more for a chance to build their dream home, Gunn said.

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Last year, a vacant lot in Davis Islands sold for $11 million, eclipsing the most expensive home sale in Tampa Bay from 2020, which was a Clearwater estate bought for more than $9 million.

The types of buyers interested in waterfront lots like this have deep pockets and a specific design in mind for their future home, Gunn said. The “in” style of wealthy Florida homeowners used to be the Mediterranean-style — a Spanish architectural movement that boomed in the early 1900s and is heavily influenced by South Florida’s architect Addison Mizner — but that’s changing.

“We’re seeing an uptick in the appeal of contemporary for several years now.” Gunn said. “And we haven’t been able to meet the demand.”

The historic Kellogg mansion in Dunedin, once owned by the man of Corn Flakes fame, was listed for sale for seven years and got no bites. After failing to secure a historic designation, Dunedin recently approved the demolishing of the Mediterranean home that’s nearly a century old.

Jennifer Zales, a luxury property specialist with Coldwell Banker Realty, said she’s also seen a demand for contemporary homes. Especially coastal contemporary homes, which are less angular than modern architectural styles and popular in California.

A contemporary house under construction on Gulf Boulevard in Redington Beach listed for $7.95 million is already under contract — even though there’s still no roof on it.

Zales also represents two waterfront lots for sale in Tampa, listed for $8 million each, on Martinique Avenue in Davis Islands and not far from Stamkos’ former home.

“There are a lot of people who are looking to be in that location in particular,” Zales said. “Which is why the values are much higher.”

And there’s one more factor raising the price for empty waterfront properties: flood risk.

“Many of the homes that were built earlier are not built in compliance with the new FEMA flood maps,” Zales said. “So when making a decision on whether to renovate a home or tear it down for vacant land, many people are looking at the future.”

The updated flood insurance rate map from the Federal Emergency Management Administration went into effect Aug. 24. Many homeowners have to assess whether or not their home is up to date, Zales said. For some properties, it’s cheaper to tear down the home already there and start over, she said.

One of Zales’ listings is a Tampa house partially renovated on Adalia Avenue and listed for nearly $3.7 million. She said it will also likely be torn down.

Zales said she always tells her clients, “Everything starts with the land and it’s driven by the land.” Whether there is a house on it or not.