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For the first time in my life, accidentally putting the wrong year when writing the date next to my signature brought a smile to my face. I know my favorite social media posts over the past week have been an ocean wave evaporating “2020” in the sand or someone taking a hammer to something with the past year on it. The year 2020 was tough for most. I am, however, extremely enthusiastic about what the next 12 months will mean for St. Petersburg as our economy continues to outperform national and Tampa Bay averages. From local developers to small restaurant owners, realtors, and the service and technology industries, many are considering St. Pete prepared to lead with optimism into the next decade. This is why I am totally bullish on St. Pete this year – and you should be too.
Let’s start with real estate, otherwise known as “location, location, location.” For residential, there is no looking back. Our region itself is already ranked No. 20 in sales and growth in the entire U.S. by Realtor.com, with an estimated sales growth prediction in the area of 8% for next year. For price growth, Tampa Bay is the highest in Florida for urban areas. For investors, asking rents are higher in the region than the national average and are already higher than pre-pandemic levels, according to Co-Star. The vacancy rate is the lowest in the last decade. Take all of this in with the fact that St. Pete sits on a peninsula where limited land is in high demand, and you have a recipe for strong home values that will only get stronger in 2021.
All of this may worry those who are increasingly concerned about making housing and homes more affordable for all. I share this concern. But many factors argue that 2021 could see significant activity to combat this growing market challenge. First, the Penny for Pinellas initiative passed and you can expect some revenues to be deployed to big projects next year including affordable housing. Second, the City of St. Petersburg has increased activity to offer land to altruistic developers who are building and selling affordable homes. And with a mayoral race next year you can expect a younger, progressive, more diverse electorate to push this issue onto the top of the agenda.
St. Pete is known as a lifestyle city and with the opening of the new Pier, along with a return of in-person events like St Pete Pride, the Grand Prix and various others, I would expect that reputation to be underlined in 2021. If you haven’t noticed, the Pier is gaining national attention, highlighted by its strong spot in USA Today’s Reader’s Choice Awards. Foot traffic is double what was expected. The Tropicana site will also begin to make major moves (with or without baseball) as the city takes proposals by the potential master developers early in Q1 2021. A wave of distinctive restaurants and bars have successfully opened in the past six months – during the height of a global pandemic – enshrining St. Pete’s status as bright star in Florida’s independent dining constellation. Look for this lifestyle distinction to continue.
Tech firms are also expanding by leaps and bounds. I remember about two years ago the Catalyst mentioned in a commercial real estate article that about 18% of the office space was currently leased to technology firms, nearly the amount taken by medical. This presence has already grown. The notice gained by the acquisition of such firms as Penny Hoarder and Callyo is only the tip of the ice “burg.” In the CompTIA top 20 best US tech cities for young entrepreneurs, our area ranked #7, directly behind Portland, Oregon. The long-term effects of Covid on the services industry, coupled with the work-from-anywhere option, added to no snow to shovel and no state income tax to pay, mean that the St. Pete area will continue to attract more attention from the tech field and creative class in 2021. Count on more high-tech and higher educated employees to move their residence to the city, further enhancing employer competition and entrepreneurship.
Arts have always been a major driver for St. Pete’s culture and economy. Coinciding with the lifestyle elements, look for significant enhancement of art as a major part and export of the city. The Downtown Partnership and the St Pete Arts Alliance will be completing a Comprehensive Arts Strategy in early 2021 to create a concentrated agenda for arts advancement.
In addition, there are two districts in the city that you should follow closely: the Innovation District and the Warehouse Arts District. Both areas will have developments that will continue to expand St. Pete’s center of gravity beyond the downtown core. The Innovation District’s top job growth sector is in arts and entertainment, just ahead of information services. The Warehouse Arts District will likely have multiple residential developments in the coming year along 22nd Ave South, next to both local artists’ studios and breweries. As for exports, some of my Tampa friends would be interested to know that several public art pieces around their Riverwalk were from St. Pete artists.
It is for all these reasons and many more that I am totally 100% optimistic on 2021 for St. Pete. Don’t underestimate how big the next 12 months will be as we all leave 2020 in the history books.
Barclay Harless is St. Petersburg Market Leader, Vice President for Bank OZK.