Q2 2012 Tampa-St. Petersburg, Florida Commercial Real Estate Economy

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Q2 2012 Tampa-St. Petersburg, Florida Commercial Real Estate Economy

Tampa Bay’s economic downturn measured by employment numbers began as long ago as 2006, well before the recession sunk its teeth in the national economy. The recession that followed, then, added injury upon injury. Moreover, Florida as a whole suffered particularly severe setbacks from the national downturn and the housing debacle and has been notably slow to mount a decisive recovery. Indeed, the Tampa Bay Business Journal reported in August, citing the 2012 second quarter CredAbility Consumer Distress Index, “foreclosures and difficulty making home payments are among the reasons the Tampa metro area ranked as the second-most financially distressed community in the United States.” A recent forecast provided by economists at the University of Central Florida cited by the Journal noted in a separate August report, meanwhile, projected “a slow recovery for Florida’s economy after examining the state’s housing market, retail sales, and unemployment levels.”

Positive moderate job growth returned to the local economy in 2011. According to data provided by the U.S. Bureau of Labor Statistics (BLS), non-farm employment in Tampa was up 20,500 jobs (1.8%) from 12 months prior and was up 37,600 (3.4%) over 24 months. The performance, however, has been mixed. The Construction sector continues to shed jobs at a hefty rate: employment therein as of July was down 6,100 jobs (11.6%) from a year earlier and amounted to only 49.2% of the total reported for July 2006 (to some extent, pre-recession construction employment was inflated by the local housing boom). And small losses over the latest recorded 12-month span were endured by the manufacturing sector and by Trade, Transportation and Utilities. Growth, on the other hand, is apparent in the large and important Professional and Business Services sector, for which a gain of 6.8% (12,600 jobs) is indicated for the latest 12-month span. Along these lines, Tampa emerged over the past as a major market for call center and back office operations. Several moves of this type have been made recently.

The housing market, meanwhile, remains weak; the fledgling positive trends in housing seen around the nation remain largely absent from the Tampa Bay area market. “While construction has picked up on a national scale, the state and Tampa, in particular, are held back by an overhang of foreclosures and delinquent mortgages that’s leading the nation,” an executive with Fifth Third Bank informed the Journal in August. Not all the news is bad, however. Metropolitan Statistical Area (MSA) homes sales were up 13.0% year-over-year to 3,000 transactions, according to the

Regional Multiple Listing Service as reported by the Journal in September 2012. “What’s more, homes are selling for more money and they are selling in less time. National Association of Realtors put the second quarter median single-family MSA home resale price at $144,300, up 11.3% year-over-year.