Jay Roberts of Prosper Group Discusses Why He Is Investing In Tampa Real Estate

For many years the Tampa Bay Area has consistently ranked as one of the top ten real estate markets in the United States, and for good reason. Tampa has long been one of the top moving destinations within the sunshine state, and with steadily growing home prices and incredibly low mortgage rates, Tampa is often seen as an investor’s dream. Although it is unlikely this year will see the same sky-high housing prices, 2022’s real estate market is expected to remain red hot. Jay Roberts, CEO of Prosper Group and an experienced New York, Miami, and LA real estate expert, has announced his intentions to expand Prosper’s investments in what Zillow calls 2022’s Hottest Housing Market — Tampa, Florida.

“Tampa is experiencing a massive growth boom that happens to certain cities once a decade. Tampa is the next Austin, Texas, Nashville, Tennessee, and Denver, Colorado in terms of hockey stick growth. The combination of population growth, a deep, growing, and diverse job market with high incomes, low and older real estate inventory starting at a low basis compared to other major cities, lifestyle, no state income taxes, and proximity to water make Tampa the #1 city to invest in real estate in the United States.” says Jay Roberts.

New Development Water Street and Gas Worx

Major cities need strong hubs to attract both long-term residents and visitors. For many years, downtown Tampa has served as a vibrant entertainment and business district for Floridians; however, in recent years, city developers have discussed the need to expand the downtown area to cater to the growing Tampa population. Today, downtown Tampa looks unrecognizable from just a few years ago due to a much-needed facelift thanks to Lightning owner Jeff Vinik and Bill Gates. Downtown Tampa has doubled its downtown footprint through a $3 billion mega-development called “Water Street Tampa.” The 56-acre mixed-use development will add an additional 9 million square feet of space in 18 distinct buildings along the bay, which will include new retail spaces, office spaces, hotels, cultural amenities, and residential spaces.

In addition to the new Water Street Development, Tampa will be pushing forward with another mega development project backed by investor Darryl Shaw, Gas Worx. Gas Worx will renovate the industrial district on the edge of Ybor City and add an additional 500,000 sq ft for offices and another 150,000 for retail, condo, and apartments.

Price Growth

In 2021, real estate investors saw unprecedented home value growth on both a national and local level. This growth was fueled by a number of factors, including historically low mortgage interest rates, downsizing boomers, pandemic moving trends, and demographic shifts. In addition to these trends, the United States’s two-decade-old housing shortage came to a head during the pandemic as home builders were slowed as a result of international supply chain issues. None of these trends are expected to change drastically from 2021 to 2022, and as home buyers continue to bid on low inventory, real estate investors are situated to make significant returns.

Inventory

Today, Tampa has an overall limited inventory of houses with high demand. This restrictive housing supply is the result of the majority of homeowners being unwilling to sell their homes and fewer new homes being built in the area. As Tampa is a highly desirable area for many Americans, the area has worked on a deficit of available homes for many years. However, while Tampa has historically had a small inventory of homes, this small number has continued to shrink since early 2020. One Zillow report found that housing inventory dipped to a record low during the end of 2019; however, there still remained fewer homes on the market at the end of 2021 versus the end of 2019. Jay Roberts of Prosper Group states that real estate investors and developers are uniquely situated to profit on the low inventory in the Tampa area, as the high number of homebuyers in the area continues to raise the average home sale profit. However, these margins are offset by rising building materials and labor costs.

Affordability

While capitalizing on supply and demand imbalances in the near-term provides profits to investors, something needs to be done to make housing and rentals more affordable in the Tampa region. The metro experienced the highest rent increases in the nation in 2021 (32.6%) and is projected to have the highest home value increases (24.6%) in 2022 by Zillow. One solution is to add density to allow builders to maximize space and provide more housing stock to the rapidly growing Tampa population.

Population Growth — Top Location for Movers in 2022

In 2020 and 2021, Florida was ranked as one of the top three states to move to in the United States. Since the pandemic began in March 2020, there have been more than 300,000 relocations to Florida, with many Americans continuing to set their sights on the sunshine state. While Florida does have a higher cost of living than many other states, Florida’s lack of income tax, low property taxes, and strong diversity make the state a highly desirable moving location for many Americans. As a result, prominent data site Smarterware has named Tampa, Florida, one of the top six places to move to in the United States.

Job Creation and Top Technology City

According to a number of surveys, one of the biggest draws for new Tampa residents has been the city’s strong job market. During 2021 alone, Tampa’s labor force grew by 114,520, a 7.4% increase. The industries that created the most jobs during 2021 included professional and business services, which created roughly 23,000 jobs, followed closely by leisure and hospitality industries, which grew by 22,300 jobs. However, despite professional and business services leading Tampa’s job growth, Forbes recently ranked Tampa the #1 emerging tech city in the USA in 2021. Tampa outranked Miami, San Francisco, and Austin on Forbes’ list, as Tampa was responsible for 25% of Florida tech jobs and within its 50 software and IT companies.

Tampa’s role in the tech industry is not expected to slow down in upcoming years. Well-known investor Cathie Wood’s firm Ark Investment Management recently announced its intentions to launch the Ark Innovation Center in St. Petersburg, a Tampa metro, in July 2023, which will serve as a talent incubator. The innovation center aims to attract top tech talent to the Tampa area and provide mentorship and funding for Tampa entrepreneurs and tech professionals.