There is a strong demand for new construction homes in the Tampa and St. Petersburg area. Unfortunately, this high demand has led to a scarcity of available lots. Building new homes requires sufficient space, but with the growing desire for newly constructed properties, finding suitable land for development is becoming increasingly challenging. This shortage has created a fiercely competitive market, resulting in higher prices and added stress for those seeking a plot of land for their dream home. Several factors contribute to this shortage, including:
Increased Demand Due to Population Growth
The population of Tampa has been rapidly increasing and is projected to continue growing over the next few years. Between 2010 and 2022, the area saw a rise of over 507,000 residents, with an estimated population of approximately 3.3 million residents in 2022. By 2025, the population is anticipated to increase to about 3.5 million residents. The Tampa Bay Region is among the top ten fastest-growing metropolitan regions in the United States. The surge of new residents has put a strain on the real estate market, especially for those searching for a place to build a new home. The average home price in the second quarter of 2018 was $259,000, but by the second quarter of 2023, that price had skyrocketed to $495,000.
Closely related to population growth, the Tampa/St.Petersburg area showed more than 20% GDP growth for the last period between 2018 and 2021. With large employers like Bedrock Capital, Renalytix, and WeBull relocating to the area, the job market is flourishing. This economic growth, along with the population boom, has led to a construction surge in the area, with residential building permits increasing by 38% since 2019. With more residential and commercial construction, competition for a limited labor pool and the higher costs associated with it further exacerbate the scarcity of lots for new construction. https://fred.stlouisfed.org/series/ATNHPIUS45300Q
Zoning and Regulatory Constraints:
The high demand for housing and the limited supply have caused inflated prices, which can be attributed to two significant factors: land-use regulations and permit delays. Regulations, such as minimum lot sizes, building height restrictions, and limits on building permits, have significantly hindered the construction of new homes in specific areas. This reduction in housing quantity has resulted in an increasing number of individuals competing for the limited property
for the Tampa/St. Petersburg area. The process of obtaining permits can cause housing and lot costs to rise. Even before construction begins, developers have to pay fixed costs for land and materials. This means that delays in the permitting process can cause developers to pay even more. Ultimately, these additional costs are passed on to consumers in the form of higher prices. Due to the implemented controls, the development in areas such as St. Petersburg, Clearwater, and Gulfport is primarily centered on redevelopment projects that involve tearing down and rebuilding existing structures instead of constructing new buildings on new lots.
Scarcity of Available Lots:
The Tampa/St. Petersburg area growth has largely taken up the available land, making new construction more challenging. Paired with zoning and regulatory constraints, finding the perfect property for your new construction home is getting more and more difficult. As a result, much of the development in places like St. Petersburg is focused on redevelopment, such as tear-down and rebuild projects, rather than new constructions on vacant lots. Moreover, environmental concerns related to the area’s wetlands further limit the availability of land for construction. If you would like help navigating the new construction process in the Tampa/St. Petersburg area, give us a call at Winway Homes. Our team has built new construction homes in the Tampa / St. Petersburg area for over 20 years.