South Pinellas County is one of the hottest real estate submarkets in the Tampa Bay area, and downtown St. Petersburg is at the epicenter of the activity.
Active adults, defined as older buyers who may or may not be working but have healthy incomes and are willing to pay for what they want, where they want it, are driving the residential purchases in downtown St. Pete, said Kristine Smale, senior vice president at Meyers Research.
Smale was one of more than a dozen speakers at the Urban Land Institute 2020 Trends conference at Armature Works in Tampa Wednesday. The conference drew hundreds of real estate professionals.
Smale highlighted the popularity of ONE St. Petersburg, the 450-foot, 253-unit condominium project at 100 1st Ave. N. developed by Kolter Group. Construction started in 2017 and all the units were sold six months before the building was finished.
“Within the last year there were 125 closings at an average price of $1.35 million,” Smale said. “Retail listings are up 30 percent over what people paid for their unit, so there’s great price appreciation in that building.”
The trend will continue, she said, citing plans for other downtown St. Petersburg projects. One of them is another Kolter development, Saltaire, a 35-story luxury condominium development. The other is 400 Central, a $300 million mixed-use development that includes a 45-story building with 300 market-rate condos.
Downtown St. Pete commanded the highest home prices of any of the submarkets Smale discussed.
• The Lutz-Carrollwood area of Hillsborough County attracts relatively high-income families with children. They typically are buying townhomes with an average price just under $300,000.
• In New Tampa and Wesley Chapel in Pasco County, “elite” buyers with household incomes just under $200,000 are purchasing homes with an average price around $500,000.
• In northwest Pasco County, entry-level suburban buyers with lower incomes are concerned about price. They are buying homes that generally average less than $300,000.
• Manatee County draws both entry-level suburban buyers and active adults who are more price-conscious, buying homes averaging around $235,000.
• Sarasota County is the most similar to south Pinellas County, with active adult buyers who want high-end features and location, including in Lakewood Ranch, which Smale said is the best-selling master planned community in the United States. “There were 97 closings in the last year at an average price point of just over $800,000,” she said.
Smale’s conclusion from the research? “Tampa Bay is firing on all cylinders and there are housing communities and areas for every buyer.”
Other speakers at the ULI conference also weighed in on the future of real estate in the Tampa-St. Pete area. Here are some highlights.
Tampa Mayor Jane Castor, who succeeded Bob Buckhorn in May, credited Buckhorn with making downtown Tampa a thriving urban core, something that’s necessary for every city’s success.
“I have the luxury of focusing on other needs and neighborhoods and making sure everyone in the city gets to participate and enjoy the success we’ll see in the future,” Castor said. “We are a city built on diversity and we celebrate that diversity. The last thing we can do is having individuals pushed out because of rising rent, rising home prices. That’s what we are looking at, working on ensuring people can stay in the neighborhoods where they have a history and they have built a life for themselves.”
The Tampa-St. Petersburg-Clearwater metro area came in No. 11 among U.S. markets to watch in the PwC Emerging Trends in Real Estate report for 2020. That was down one notch from a year ago.
The top 10 cities – primarily in the southeast United States – generally are in states with no or low state income taxes, said Mitch Roschelle, partner and U.S. national real estate advisory practice leader at PwC.
One trend he’s watching in 2020 is rent control.
“Economics that have led to the overproduction of high-end housing and a shortfall in workforce housing have set the stage for residential rent control, and many in the industry fear this will spread in the future,” the PwC report said.
The report includes a breakdown of states with and without rent control. Florida preempts rent control, according to the report.
“I think you will see more and more of this from a legislative and public policy perspective,” Roschelle said, adding “That’s trying to fix a problem with a new problem.”
Rapid advances in technology will impact real estate as well, said Deven Spear, chief innovation officer at Overabove, a Connecticut-based marketing firm.
The convergence of computing power, artificial intelligence, robotics, virtual and augmented reality, the Internet of Things, blockchain, sensors and 3D printing will create new business models and disruption.
“Digital humans” — very lifelike autonomous avatars – eventually could replace people in hotel lobbies and other hospitality settings. Augmented reality will change the way people shop for real estate. High speed internet connections through 5G combined with sensors will mean every neighborhood and city will be connected through networks, he said.
“Just about every technology will impact every asset class in the real estate market. It’s just simply a matter of when,” Spear said.