Resilience of the Tampa Market
by Nathan Trunfio, Direct Lending Partners
P rior to the coronavirus bringing the nation to a standstill, Tampa ranked amongst the best real estate investment markets in 2020. This trend was visible in many of the markets that DLP Real Estate Capital operates: fast-growing mid-tier markets, like Tampa, are attracting new companies, young professionals, and working-class families seeking a higher quality of life at a lower cost of living. For years, DLP had placed an emphasis on investing in Florida and the Southern region for multi-family financing and acquisitions, but recently began investing with greater frequency and success. With Florida and most of the nation now open, many wonder if Tampa will continue its trend as a great investment market, or if this impending recession has effectively brought an end to growth in the region? From our perspective, all indicators point toward continued growth in Tampa. Unlike the 2008 recession when the real estate market was dealing with an abundant supply of housing and subprime lending, Tampa is experiencing the exact opposite. With a major housing shortage and unprecedented demand, the need for new home construction, fix and flips, and rental properties are greater than ever. DLP Real Estate Capital is committed to meeting this need and easing the imbalance. Our new construction arm is building affordable, energy-efficient homes across many of Florida’s fastest growing markets. We are very bullish on both build-to-sell and build-to-rent new construction investment strategies, and as a lender have already seen an uptick in demand for new construction loans. While the residential housing market in Tampa saw one of its largest drops in home sales in April, it wasn’t as dramatic as expected. Once the stay-at-home orders were lifted, the real estate market quickly bounced back. By the following month, May’s new home listings in Florida saw
a 37 percent rebound compared to April, which nationally proved to be the economic bottom of the COVID impacts. So, should investors consider moving their money into the Tampa region? It’s important to understand the factors driving the current market to determine its sustainability. The low inventory coupled with rising home prices and a strong overall economy is creating a highly competitive investment landscape. Unemployment is significantly lower than the national average, which is a contributing factor to why Tampa has been listed as one of the most COVID- resilient markets. As long as job opportunities remain and companies rebound, housing demands will continue to increase. With a strong pipeline of new home starts, we should see a healthier relationship between inventory and demand emerge. We’ve already seen an uptick in demand for new construction loans and feel investing in Tampa’s new construction market is a strong strategy. Throughout the pandemic, DLP’s debt financing arm, Direct Lending Partners, continued to meet this demand by funding loans for new construction, fix and flips, and multi- family properties when many lenders closed their doors or significantly reduced their offering. A considerable amount of this demand originated from borrowers investing in properties in the southern U.S. They’re seeing great returns on investments. Rentals are scooped up quickly in markets just like Tampa, and properties rarely spend extended periods of time on the market. As a result, DLP has more borrowers than ever who are thriving and scaling up their businesses. For more information on acquiring investment financing in Tampa or other national markets, contact DLP Direct Lending Partners by visiting directlendingpartners.com to speak with a Funding Specialist. Also, visit TalkingLoudly. com to subscribe to our podcast and get cutting edge news on real estate investing from the industry experts. •
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