The Tampa housing market continues to recover from the devastating recession, which saw housing starts activity fall by 85% in the five county market between early 2006 and late 2009. As of mid-2014, the Tampa market annual pace for new housing starts was 5,853 units. While this was a 69% improvement from the 3,462 homes built in 2009, it represents just 26% of the peak starts (22,409 units for the twelve months ending March 31, 2006). Families that lost their homes by foreclosure, have difficulty in qualifying for a mortgage or can’t afford the rising new home prices have driven a greater portion of housing demand into rental apartments.
So, where does growth come from over the next five years for new home builders? While Florida, as a whole has certainly established itself as a desirable choice for retirees, Tampa has typically focused on family buyers. Demographics will change this. Claritas estimates for household growth between 2014 and 2019 indicate that “Baby Boomers” and not millennials will drive demand for housing in Tampa Bay. The year 2019 is significant as 100% of the Baby Boom (defined as those born between 1946 and 1964) will be age 55 and older.
“Head of Households” whose age is between 35 and 44 years
old in 2019 will only grow by 598 new households per year, or about 10% of the
new construction expected to be built annually through 2019 in these two
counties. The “Baby Boomer” will
represent the major growth opportunities between 2014 and 2019. Hillsborough and Pasco Counties are expected
to add 35,300 households per year into this age cohort by 2019, myself included. This is greater than 100% of the annual
growth as some younger age groups are expected to see household count
decline. Does this mean a rise in
“active adult” communities? Not
necessarily, as more of the retirees are coming from the Mid-Atlantic and
Northeast and they are used to more urban living. Many could be attracted to downtown
living. Many will choose not to live in
purely age restricted communities. But
considering that there are just a few new home communities that are age
restricted, we do expect to see growth in the number of age restricted
offerings in Tampa over the next five years.