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JUDY STARKA gangbusters surge in housing starts is luring national builders to the Tampa Bay market.
The Tampa Bay housing market recorded its second-best quarter in the last 20 years in the second quarter of this year, with starts up 19.2 percent during the first half of the year.
There were 3,495 starts during the second quarter. Those numbers overshadowed the second quarter a year ago, when there were 2,933 starts. That's because new statewide building regulations went into effect March 1, 2002, and permit offices were backed up for months, explained Tony Polito, director for the Tampa Bay region of Metrostudy, which tracks new housing.
Starts came roaring back in the third quarter of last year, the best quarter ever, when all those permits finally were issued and starts rose to 4,200.
"Over the last 12 months, from July 1, 2002, to June 30, 2003, we started 14,389 homes," Polito said. Other than the permit anomaly, the area has been "amazingly consistent," he said. He anticipates the area is on pace for 13,600 to 14,000 starts this year, up 40 percent over two years ago.
Despite the uncertainty of war abroad and an otherwise lackluster economy at home, Tampa Bay is looking good these days. Polito enumerated some factors: The area is a top 10 market for housing, in the top 10 for job growth (11,200 jobs were added in the second quarter), still a top choice for retirement living, and adding about 40,000 people a year to the population.
Little wonder, then, that a handful of major developers and builders are striding into the Tampa Bay marketplace:
D.R. Horton, the nation's largest builder, according to the respected Builder magazine annual ranking, recently announced plans to revive the unsuccessful Rutland Estate project in St. Petersburg, its first foothold in the area. Horton is seeking to acquire another parcel in St. Petersburg and will build at two sites in Pasco - Saddle Creek at Interstate 75 and State Road 54, and Little Creek at Little Road and Trouble Creek Road - and in Manatee County at I-75 and State Road 70.
KB Home, No. 5, acquired American Heritage Homes and is building in 11 communities around Tampa Bay.
Transeastern Properties of Coral Springs (No. 56) recently introduced its first project, Live Oak Preserve in New Tampa, which last month sold 251 homes in three days. Eventually there will be 1,600 homes. Avatar Holdings of Coral Gables (No. 71) has bought 600 lots at Cory Lake Isles.
LandMar, a Jacksonville-based developer, will soon open its Grand Hampton project in the New Tampa corridor, where ICI Homes (No. 82) will be among the builders.
"If you look at the long-term prospects and demographics, Florida is going to be an attractive market relative to the Southeast," Polito said.
"There's more available land in north central Florida, from Sarasota north into Citrus," he said. The area is expected to grow in population from about 2.45-million today to 2.7-million by 2007. "When you look at our strong demographic profile," he said, it's no surprise that the national builders have "a natural movement toward Tampa."
Florida added 77,600 new jobs last year, ranking it first for job growth, he said, way ahead of the No. 2 state, Arizona, which added 16,000 jobs. Four key job sectors each added 15,000 to 20,000 jobs in Florida: construction, business services, health and educational services, and leisure and hospitality. The biggest growth sectors are the under-24 age groups (those educational services) and the 55-plus group (health services).
Last week Sperling's BestPlaces ranked Bradenton the No. 1 place to retire in America, citing the weather, the outdoors, health care and cultural amenities as the big draws. At the Southeast Building Conference last month in Orlando, Polito's colleague, Brad Hunter, director of the South Florida market for Metrostudy, talked about a coming "profit squeeze" for "builders who need to do high volume." They are being forced to buy lots "at higher and higher prices because sellers show no mercy," but will get to the point where they can no longer pass on 15 percent annual price increases as they have in the last year or two. With mortgage interest rates so low, buyers could absorb those increases, but as rates begin an upward drift, that will end.
"Investor demand has been driving the market," Hunter said, because stocks have offered such a poor rate of return compared to real estate. "Be prepared a year from now to rely on pure user demand," i.e., buyers who want a place to live rather than investors. If the stock market starts to look better, less money will pour into real estate and more into other investments.
In Tampa Bay, the two major growth corridors are south Hillsborough and southwest and central Pasco. Of the 105,715 future lots Metrostudy tracks, half are in southwest and central Pasco. New housing starts south of the Alafia River now total over 2,100 homes. A quarter of the future lots tracked by Metrostudy are in south Hillsborough.
5 best places to retire
Bradenton
Fort Collins, Colo.
Bend, Ore.
Asheville, N.C.
Brunswick, Maine
The 5 runners-up
Santa Fe, N.M.
Hot Springs, Ark.
San Luis Obispo, Calif.
Madison, Wis.
Amherst, Mass.
- Source: Sperling's BestPlaces,. Visit www.bestplaces.net for details about each city.