A recent report found that investment returns from reselling properties in need of repairs are the worst since the recession.
St. Petersburg, Fla. —
The Tampa Bay area seems to continue to grow, and it's showing in the housing market.
Now, some groups are turning to flipping homes to make a profit and help homeowners close deals.
The trend is evident when driving through city streets like West Shore Boulevard in South Tampa, where construction crews are either tearing down old homes to make way for new ones or completely renovating old homes.
A recent report from real estate data management company ATTOM and StorageCafe, the research arm of the self-storage facility marketplace, found that while the trend is strong in Tampa Bay, it's in significant decline nationwide.
Tampa has been named one of the best cities in the U.S. to buy a home that needs fixing up, and StorageCafe found that buying a home to renovate in Tampa can save buyers an average of $80,000, with even more savings in Florida's other major cities of Miami, Orlando, and Jacksonville.
Meanwhile, ATTOM found that the national average return on investment on homes in need of repairs is the lowest since 2007.
The number of single-family homes and condominiums being resold in 2023 is down 29.3% from last year, which the group said is the biggest annual decline since the Great Recession in 2008.
Specifically, the report noted that investors flipped fewer homes last year, and profits and margins on short-term flips also fell. Nationwide, gross profits on a “typical home flip” fell by $66,000 in 2023, according to ATTOM.
But investors aren't planning on retreating from Tampa Bay's fixer-upper property industry.
If you've lived in the Tampa Bay area for the past few years, you may have noticed that companies have been purchasing old or vacant homes and renovating them into new housing, many of which are being offered as rental properties.
A recent analysis by the Tampa Bay Times suggests this isn't just a suspicion.
The report said the corporate landowners with the largest presence in Tampa Bay are “investment companies based in states such as Arizona, Illinois and Texas.”
As of September 2023, seven different companies own more than 1,000 homes in the Tampa-St. Petersburg area, but none of them have started operations in Florida.
Locally, there appears to be a surge in resales of properties in need of repairs, but while this trend reflects how great a place the Tampa Bay Area is to live, the impact on supply must also be considered.
Season 2 of the Tampa-based HGTV show “100 Day Dream Home” follows husband and wife Brian and Mike Kleinschmidt as they help homeowners build new homes off of their lots in more rural areas east of Tampa, including Plant City and Dover.