The number of homes in downtown St. Petersburg has grown more than 60 percent since the Great Recession, and a leading realtor in the city says there’s more development ahead.
“There could be 800 more new condo units in St. Pete over the next five years,” said Bob Glaser, president and CEO of Smith & Associates Real Estate. “That number might sound a little high, but it’s not, because with ONE [a 253-unit condo development] being sold out and the fact that the other buildings have limited availability, there’s not more than 15 condos available in downtown St. Pete right now.”
The economic downtown of 2008 caused a residential housing crisis nationwide. In downtown St. Petersburg, residential development slowed but never stopped, city statistics show.
Home sales in downtown’s 33701 zip code have grown as well, according to information from the Pinellas Realtor Organization.
There were an estimated 15,170 people living in downtown’s 33701 zip code in 2016, the most recent figure available from the United States Census Bureau. That’s a 15 percent increase from the 13,260 people living in the zip code in 2011, according to Census Bureau statistics.
More restaurants and retail shops opened as the population increased, the downtown living wave also has put heavy demands on aging infrastructure, and led to traffic congestion and lack of affordable housing, said David Bennett, president and CEO, Pinellas Realtor Organization.
Back in the market
A handful of buildings in the urban core, largely planned before the recession hit, opened between 2009 and 2014, including Ovation and Signature Place, mixed-use projects that opened in 2009, followed by Fusion 1560 in 2011 and Modera Prime 235 in 2014.
For Glaser, the key event occurred in 2014, when Kolter Urban, a division of West Palm Beach-based Kolter Group, announced construction of ONE, a 41-story tower with 243 condos and a hotel at 100 1st Ave. N.
“They were the first ones back in the market and it was not easy for them nor the capital group they worked with to see St. Pete as another viable place for a condominium tower,” Glaser said. “They took the chance and they are just about to close a sold-out tower.”
Others followed, including Related Group, which is building ICON at 801 Central Avenue, with 377 apartments. A map from the city’s economic development department showed nearly a dozen residential projects planned or underway as of September.
View Downtown living projects in a full screen map
Growing institutions near downtown, such as University of South Florida St. Petersburg and Johns Hopkins All Children’s Hospital, account for much of the increased demand, Bennett said.
Demographics have evolved as the residential nature of the urban core changed. Early residents were local people who moved from another building downtown or from another part of St. Petersburg. The next tranche of buyers were visitors from out of town, who decided it was time to “drop anchor,” in preparation for retirement.
“Now there’s a significant number of people who are from the Northeast and the Midwest, Chicago and New York, who can work from anywhere and made the decision to try this as a place to live and work from here,” Glaser said.
Who lives in 33701?
2011: 49.6 years old
2016: 47.6 years old
Median household income
Median earnings, male full-time workers
Median earnings, female full-time workers
Source: U.S. Census Bureau
While the market remains strong, there are new challenges.
“Think about when Kolter was first trying to make a go of it, how hard it was to get the investment group together,” Glaser said. “Today’s it’s more of a struggle to find the right property. Construction is a lot more expensive than in the past, so to be able to make the right mix between construction, what we’re going to sell them at, and also what kind of amenities are in the buildings, to differentiate them and make the market attractive to people.”
There’s almost no more land available downtown, Bennett said. A New York developer, Red Apple Group, demolished the Pheil Hotel site at 400 Central Ave. in 2016, and it’s been vacant since then, although Red Apple is expected to build a mixed-use project on the site. Bennett expects the condos in the development will have starting sales prices of at least $400,000 to $500,000.
“When you have a built-out community, the land that is available becomes very expensive,” Bennett said. There are very few apartments under $1,500 per month, and condos cost $300 to $400 per square foot.
“A lot of the people living in the $699,000 to $1.2 million condos typically have come from somewhere else,” Bennett said. Florida property taxes are much lower than other areas, he said. “A $600,000 condo in Chicago will have a $21,000 tax bill, and that same condo here has about an $8,000 tax bill. So they can save money and pocket some of that for retirement.”
Those prices have squeezed out moderate and low income workers, including police officers and teachers, he said.
A handful of affordable housing projects have been built in and near downtown St. Petersburg. One under construction now is Delmar 745, a 65-unit apartment complex under construction now, with plans to open next fall.
But the need for affordable housing far outweighs the available supply. A recent study by the Foundation for a Healthy St. Petersburg estimated a shortfall of 54,000 affordable housing units countywide; it did not break out a number for downtown St. Petersburg, but the affordable housing communities that already exist downtown say they have long waiting lists.
There also is strong demand for high-priced homes, Bennet said. “My understanding is that if a condo came up for sale at 400 Beach Drive, a nice older project, there would be a waiting list for it.”
Absorption rates, or the rate at which active listings are selling in a given market, are high, which means homes are selling quickly, Bennett said.
But a decade out from the recession, Glaser doesn’t see the same kind of housing bubble brewing now as occurred then. Housing prices are not over-heated, he said, and lenders have tightened their standards.
“You can’t get easy money from the banks. You have to qualify for it,” he said.