Tampa Homestyles Predicts Continued Real Estate Boom as Wealthy Northeasterners Rush to Buy Luxury Homes

Written by Posted On Friday, 17 July 2020 13:43

As the modern office space disappears due to COVID-19, big-city residents are relocating to Tampa Bay and other hot Florida markets, where luxury home sales are on the rise.

As the coronavirus pandemic continues to ravage the country, people everywhere – especially in the business, financial, and corporate sectors – have happily settled into the work-from-home lifestyle. And since most people are just as productive working in their pajamas as they are in the office, many companies are making the change permanent. While it may not seem obvious, it’s having a huge impact on the Florida real estate market, particularly in Tampa Bay.

While it’s true that telecommuting has been a welcome change for many, for some East Coasters – especially those living in big cities like New York City – working from home where there isn’t enough space has been less than ideal. Now, a significant number of wealthy East Coasters are packing their bags and leaving the big, crowded cities that they call home for more spacious and scenic places to live and work.

Wealthy buyers are especially attracted to hot Florida real estate markets like Tampa Bay, where luxury home sales are on the rise and buyers can get more for their money than they could in larger cities. Jaime Brown, owner of Tampa Homestyles, a Tampa-based real estate company specializing in luxury homes, says that she has witnessed the trend firsthand, with new clients flocking to the city to buy up its luxury homes. For over 12 years, Brown has been selling real estate in the Tampa Bay area but hasn’t seen anything like the current boom. Since the pandemic began, many of her clients have come from New York, New Jersey, Pennsylvania, and across New England.

Brown says that the Tampa Bay area is currently known as a “real estate hot spot” in Florida, for all kinds of luxury homes, from condos to new constructions. Outside of South Florida, Tampa Bay has become the state’s most high-demand real estate market.

One example of this upward trend is the announcement that the Ritz-Carlton Townhouses, a name not associated with Tampa until now, will soon start building new luxury constructions on trendy Bayshore Drive, where condo prices will start at $1.8 million. While this is big news, it’s not the only thing happening in Tampa; new constructions and luxury homes continue to be in high demand throughout the area, and from Brown’s point of view, it’s going to continue well into the future.

Tampa Offers East Coasters Cheaper, More Spacious Homes

According to Brown, people are leaving the cold and expensive Northeast for the sunny Florida shore, where they’re buying up luxury homes from Tampa Homestyles in record numbers. This isn’t exactly new; since 2018, the New York metropolitan area has been losing 100 people per day, but since the arrival of the pandemic, this number has nearly tripled.

Brown says that she has always had buyers from New York City and the Northeast, but people are suddenly a lot more interested in Tampa Bay. In the past, New Yorkers moving to Florida tended to flock to busy and high-energy cities like Miami. While Tampa’s sprawling, spacious layout was less popular before the pandemic, as people look to escape overcrowded cities, Tampa is trending.

Clients tell Brown that they’re leaving for a lot of reasons. For one thing, big, crowded cities aren’t exactly comfortable places to be during a pandemic. Many people are working from home, but homes in big cities are significantly smaller than those elsewhere, and with kids home from school, there just isn’t enough space for everyone to feel comfortable. The crowded New York City subways, which most people use to get to work and where social distancing is impossible, are among the most dangerous places to be as COVID-19 spreads. Even if people wanted to return to work, it wouldn’t be safe to, and driving in heavy traffic wouldn’t be worth it.

On top of this, many Northeastern cities don’t feel like themselves these days; theaters, restaurants, and other entertainment venues that make life in the city worth living still remain closed. Even a walk through your neighborhood doesn’t look the same; recent protests have left cities in New York and New Jersey with boarded-up store windows to protect businesses from property damage. And ongoing civil unrest, combined with a public health emergency, has made life even more stressful for many residents.

Once people started working from home, they began to wonder why they were paying thousands of dollars per month to live near offices that they didn’t use. And when many companies confirmed that work-from-home arrangements would continue after the pandemic, people began to think seriously about where they would love to live if they didn’t have to go to the office every day. What if they could live in their ideal paradise and pay less for it?

Money is a huge part of East Coasters’ decisions to relocate to Florida. Brown says that many people are being drawn to the Tampa Bay area because they can get a lot more space for a significantly lower price tag than they’d see in the Northeast. The spacious, scenic, waterfront luxury homes sold by Tampa Homestyles sell for a fraction of what a much smaller place would cost in New York, which makes moving a no-brainer.

This is compounded by the fact that taxes in New York are around 13 percent for high earners, with deductions on federal income taxes no longer allowed. But in Florida, there are no state income taxes, so this is a huge draw for those looking to save money, Brown says. When you pair this with the desire to live in places that are quieter and more relaxing and allow you to go outside without encountering too many other people, Brown says that Tampa makes a lot of sense.

Tampa Luxury Home Sales Skyrocket

Brown didn’t necessarily expect Tampa Homestyles to see a lot of business during the pandemic, but she says that her expectations have been surpassed. Not only are many sales happening, but although luxury homes are selling at higher price points, buyers are serious about securing deals. Brown and Tampa Homestyles were recently involved in the sale of a $6.4 million home on the South Tampa waterfront. The sale brought in a record-setting price that was the most that anyone had paid for a speculative home (new constructions that are not custom designed) in Tampa. Modern construction is extremely popular in Tampa, and buyers are willing to pay big for homes like this one, which features six bedrooms, seven baths, and waterfront views.

To Brown, this makes a lot of sense. Tampa has plenty of single-family homes that are far more spacious than what you can find in bigger cities. The luxury homes sold by Tampa Homestyles are expansive; they have large offices and plenty of space to work from home. Nearly every home has a pool where parents can relax and kids can play, along with a gym where parents can exercise without having to go out and risk getting sick. All of this makes life a lot simpler and makes quarantining in Florida more fun and relaxing than it would be in a big, crowded city. Kids have space to play outside while parents work, so it’s easier for everyone to be a little happier. This will be even more true once winter comes and the temperatures in Florida remain warm. With just over 335,000 people in Tampa city limits, people feel safe there. It’s easy to stay home and not feel deprived, even as the virus ravages the rest of the country. Driving in Tampa is easy and an enormous relief compared to cramming into the congested New York subway or driving in city traffic.

Realtors throughout the Tampa Bay area are noticing huge increases in the number of homes they’re selling, with some agents selling far more than they did a year ago. In fact, real estate is starting to pick up across the entire country. Across the U.S., May sales for newly built homes increased by 13 percent compared to the previous year. Mortgage applications are also high. According to the National Association of Realtors (NAR), statistics show that pending home sales increased by 44.3 percent in May. With mortgage rates in the U.S. at historic lows, at around 3.03 percent (2 percent lower than they were a year and a half ago), people are incredibly motivated to buy. Brown says that rates will likely remain this low throughout the year and that people will continue to buy for fear of missing out.

While the U.S. market is improving in some places, Tampa stands out due to several factors that make it unique. For one thing, new constructions going up in Tampa have had a big impact, since in many other U.S. cities, people are waiting to sell, and the number of homes for sale has dipped. The new constructions in Tampa have allowed it to keep up with demand somewhat. Brown notes that by building new constructions, Tampa is giving home buyers more to choose from. New homes are also appealing because they are more customizable.

Brown also credits Tampa Homestyles’ recent success with the fact that, unlike other businesses that were shut down during the pandemic, real estate has been able to go on much as it did before, with a few important safety measures like hand sanitizer, face masks, and having fewer people at showings. Other services like inspections and closings are easily supported by the internet. Brown says that people have continued to attend showings and travel from elsewhere to do so. Out-of-town buyers are especially serious about buying, in Brown’s experience.

Tampa has also seen higher prices than usual when it comes to sales. Despite early predictions that prices would have to be reduced for homes to sell, Brown says that home values have instead skyrocketed, and new homes are getting bought up quickly, sometimes in days. The NAR says that almost 60 percent of homes that went on the market in May sold in under a month. And as people who didn’t imagine selling during the pandemic see that this is happening, they’re pushing themselves to get their homes ready to sell. The quick pace is also driving buyers to be less picky, make competitive offers, and make them quickly.

Tampa homes selling for more than $1 million are up by nine percent compared to last year, including condos, townhouses, and single-family homes. The median price for luxury homes in Tampa is also up this year by three percent. Between March and late June, both home sales and pending sales at the $2 million and up price point increased three times when compared to the year prior.

A huge percentage of Tampa Homestyles’ luxury home sales are coming from out-of-state buyers, Brown says. Other real estate brokers in the area say that up to 75 percent of their current buyers come from New York and New Jersey. Out-of-state buyers are also the people buying even more expensive homes, priced at $3.5 million or more. This makes sense, Brown says, since you can get so much more for your money in Tampa.

Some agents attribute the numbers to the fact that the spring season was less active than usual, as many people were staying indoors and worried about what would become of their jobs. But overall, a slow spring hasn’t had an impact on business, as summer sales are hitting new highs this year; people who were ready to buy in spring but were held back by uncertainty and restrictions jumped at the opportunity to do so in summer once stay-at-home orders were lifted. This means that Brown and Tampa Homestyles are a lot busier than usual at this time of year.

As she continues to thrive in the booming market and as mortgage rates stay low and people continue to re-envision their futures, Brown says that she doesn’t expect business to slow down any time soon.

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