The Urban Land Institute (ULI) has announced that Tampa Bay is expected to lead the nation in homebuilding in 2025, despite recent challenges from two major hurricanes. According to ULI and PwC’s Emerging Trends in Real Estate 2025 report, Tampa Bay ranks No. 1 in homebuilding prospects, surpassing major markets like Fort Lauderdale and California’s Inland Empire. Tampa Bay also climbed significantly, reaching the No. 4 spot in ULI’s overall market rankings.
Resilience and Optimism Despite Hurricane Impact
Although hurricanes Helene and Milton recently affected Tampa Bay, ULI Tampa Bay’s executive director, Lee Lowry, remains optimistic about the area’s growth. “Our great quality of life, rising pay rates, gorgeous weather, and booming economy continue to make Tampa and St. Petersburg desirable places to work and live,” Lowry stated. Despite a damaged housing stock, the region is set to “build back stronger” as ULI members look to make positive changes in the market.
Challenges in Tampa Bay’s Housing Market
ULI’s report highlights some key challenges in Tampa Bay’s housing market. Rising homeowner insurance costs and climate-related expenses are growing concerns across Florida, with Tampa Bay’s insurance premiums now among the top ten most costly in the nation. This could impact both in-migration rates and the affordability of housing for newcomers.
Tampa’s Affordability Decline and Business Advantage
Housing affordability in Tampa Bay has declined, but the region still has some cost advantages for businesses. According to Moody’s, business costs in Tampa are approximately 95% of the national average, with lower expenses for energy, taxes, and office rent. These lower costs may continue to attract businesses, even as housing costs rise.
Future Prospects: Interest Rates and Office Space Challenges
Interest rates are anticipated to decrease in 2025, which could improve the overall sentiment in the real estate market. However, while St. Petersburg is constructing new office space, other markets may struggle to justify new developments due to lender concerns. PwC’s Andrew Alperstein notes that despite ongoing challenges, industry optimism is on the rise, with firms encouraged to adjust growth strategies for long-term success.
Top U.S. Real Estate Markets for 2025
- Dallas-Fort Worth
- Miami
- Houston
- Tampa-St. Petersburg
- Nashville, Tennessee
- Orlando
- Atlanta
- Boston
- Salt Lake City
- Phoenix
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