Tampa's Housing Market Facing a Unique Problem
LOS ANGELES, Nov. 13, 2012 /PRNewswire-iReach/ -- With its sun, sand, and warm temperatures – not to mention prices that never seem to inflate nearly as high as Miami's, Ft. Lauderdale's, or West Palm Beach's – it's easy to see why so many people want to call Tampa home. In fact, after years of little to no growth, the number of new constructions is finally on the rise here!
During the 3rd quarter of 2012, more than 1,300 new homes started going up around the Tampa Bay area. In fact, some subcontractors – like electricians and land surveyors – actually reported working the most hours they've worked in the past seven years. While the numbers are still nowhere near the 6,600 new homes that were built during the 3rd quarter of 2005, it's a step in the right direction. However, all of that building has led to a rather unique problem. In Tampa, there's actually a shortage of construction workers! Since Florida was hit so hard by the housing bubble burst in 2007, many of the Sunshine State's construction workers headed north. Sure, construction ground to a screeching halt all over the country, but at least other states provided a place to live where the cost of living wasn't quite so high. Some construction workers weren't willing to trade in all of that Florida sunshine, so they traded industries instead. Now that the housing market is starting to come back to life, they've moved forward in other careers. Now there aren't enough construction workers to keep up with the demand!
Just how many construction workers has the state lost?
According to data collected by the state, there were almost 692,000 construction workers employed around the state of Florida back in June 2006 – back when the housing bubble was at its all-time peak. Today, however, the state says there are only 317,000 construction workers. While the number is starting to go up ever so slightly, builders have started feeling the pinch.
So, what happens now?
Tampa-area builders have a decision to make – they can either pay their workers more than their competitors are paying, or they can let half-finished houses sit there (or, let empty lots sit, waiting for workers to become available). Letting houses sit unfinished – or delaying ground-breakings – is a surefire way to delay the local housing market's recovery. However, paying construction workers more means passing on additional costs to buyers, which could convince people not to buy after all. None of those solutions are ideal for Tampa's housing market, which is fragile to begin with.
Just how fragile is it?
The foreclosure situation is in full-swing – which is why local experts would love to hear the sound of hammers in full-swing, too!
In September, the number of Tampa-area foreclosure filings went up 35%, and local experts say it's only a matter of time before a glut of foreclosures hits the market. When they do, it will hurt the chances of traditional homes, simply because foreclosures are priced so much lower than their traditional counterparts. In fact, local experts say the vast amount of repossessed houses have not hit the market yet.
Right now, the Tampa area is ranked 13th in the country when it comes to foreclosures.
But what about next year?
According to the results of a recent study, there is reason to be a little more optimistic. Last week, the Urban Land Institute and PricewaterhouseCoopers unveiled their annual report, 2013 Emerging Trends in Real Estate. In it, they predict that the Tampa area will rank towards the middle of America's major metros – 29th out of 51 metros, to be exact – when it comes to foreclosures in 2013.