Tampa Bay Real Estate Market Sees Surge of Perks as Hesitancy Grows
The advertisements are meant to entice: A month of free rent in a high-end apartment in downtown St. Petersburg. A free pool at a new housing development in Tampa. A $20 Amazon gift card for taking a virtual tour. “GREAT Specials!!!”
Across the Tampa Bay area, there are examples of these incentives springing up, for both people looking to buy new houses or sign an apartment lease. In an area that has typically seen both the prices of single-family homes and rent steadily go up the past few years, it’s a sign that some in the local real estate market are having to work harder than usual to attract interested customers as the coronavirus pandemic continues to keep the economy on hold.
William Ryan Homes, which has nine housing developments in the Tampa area and builds about 200 houses a year, had already been offering free pools for buyers who commit to the newly constructed homes (or $20,000 toward bonus features like a “gourmet kitchen”) in January. But lately, after seeing a 50% drop in purchases since the pandemic began, the company has been promoting those perks more heavily, said Tampa division president Jeff Thorson.
The builder also started offering a price protection program, that allows buyers who have entered into a contract on a home to get a lower price if the base price falls before the closing.
William Ryan Homes hasn’t instituted that program since the Great Recession.
“(That program) is in case people are concerned about, ‘Jeez, are the prices going to fall,” Thorson said. “We felt this may provide an additional level of confidence.”
Asked whether this shift could represent a lingering buyers’ market in the Tampa Bay area, Thorson said it’s simply too early to know.
“You just don’t know when things are going to start opening up,” he said. ‘What is the new normal going to be?”
In the apartment world, some complexes that have never had to roll out new tenant incentives have started doing so now, said Nico Hohman, a real estate broker and director of commercial real estate for Tomlin Commercial Real Estate Services, which serves clients that buy apartment buildings.
Most of these incentives were launched in late March, he said, in response to the pandemic’s worsening toll on Florida.
“I’ve certainly seen an uptick not just in how much you’re getting but also the number of complexes doing it,” he said.
Brian Scott Sprague, a broker associate with Smith and Associates Real Estate developer services, also pointed out the high number of new apartment buildings nearing completion, spurring more competition for new tenants as well.
“There’s a significant amount of inventory coming on the market all at once,” he said.
Some of the new complexes near downtown St. Petersburg are offering a free month of rent to new tenants, including 1701 Central, which has studios starting at $1,525 per month and two-bedrooms that cost nearly $3,000.
These new sweeteners aren’t just for renters and buyers, either. Higher commissions are being offered to brokers and real estate agents who help close deals, or even direct prospective tenants toward a particular complex.
The offers were so good, in fact, Sprague ended up buying a new home himself: a new 2-bedroom, 2.5-bathroom house in Palmetto, in a development called Sanctuary Cove close to the Manatee River.
He was told the total price of the house was marked down $30,000 after the previous buyer walked away as the coronavirus crisis worsened. Because he was the broker on his own sale, Sprague was also able to get a 3 percent commission plus a $7,000 bonus, nearly covering all his closing costs.
“I couldn’t walk away from the deal,” he said.
Posted on nationalmortgagenews.com on 4/24/2020.