Overseas buyers and institutional investors are driving a homebuilding frenzy in Tampa even as other real estate sectors continue to struggle five years after the crash.
Outsiders are scooping up spare farmland and vacant plots at breakneck speed even as retail and office space continues to struggle, worrying some observers that one of Florida’s hardest-hit areas from the real estate collapse is in for another ride.
Building permits for single-family homes soared 60 percent in 12 months, according to RealtyTrac’s first-quarter data. Foreclosure starts dropped 10 percent in that same period of time, from 1,416 to 1,273.
“This is a genuine recovery, but not a grassroots one,” RealtyTrac Vice President Daren Blomquist told The Real Deal. “It’s heavily reliant on deep-pocketed investors coming in and snatching up real estate. A high percentage of land deals are making all-cash purchases, indicating that many buyers are foreign.”
In the past four years, overseas buyers have shelled out about $50 billion on more than 250,000 properties across the state, data from the National Association of Realtors show.
In the Tampa metropolitan area, an active market for homebuilding hasn’t yet lifted retail or commercial properties.
Aside from some fast food, Tampa has few restaurants, shopping centers or large commercial developments in the pipeline, according to Carlos Fuentes, commercial director of St. Petersburg-based Namaste Realty.
“On the commercial side, there is instability and a lack of confidence of people in the marketplace,” Fuentes said. “Banks’ tighter lending practices have made it very difficult to secure financing.”
The Seminole-based Sweetbay Supermarket chain announced earlier this year it planned to shutter 33 stores, 22 of which were in the Tampa Bay area. Nearly 80 percent of the more than 1 million square feet of vacant retail subleasing space on the Florida market is based around Tampa, the Tampa Bay Times reported, citing CBRE’s annual Florida retail report.
Brad Monroe, a Realtor who recently left Land O’ Lakes-based Prudential Tropical Realty, points to a 1.5-acre parcel on the 7700 block of Palm River Road in Tampa as a sign of hope that real estate growth in activity with amount to more than another housing bubble.
Suncoast Medical Clinic has plans for a 16,000-square-foot facility on the lot, which has lied dormant for more than 30 years, Monroe said.
Although foreclosures are being removed as a construction hurdle, builders should be cautious of shadow inventory, or delayed foreclosures, Blomquist said, adding that he doesn’t believe either Tampa’s residential land grab or its decline in retail are likely to be long-term.
“The pendulum tends to swing,” Blomquist said.