Originally Published August 22, 2017
Nationally, employment growth is solid and rapidly improving, as of July, with forecasts of the job market further tightening in the coming months. You can even hear employers talk about how hard it is to hire right now. It’s also not uncommon for people to be changing jobs as they get recruited away from prior positions.
How Tampa Bay Is Improving
Our Tampa Bay Area led the state of Florida in job creation in the last calendar year, and also created the most jobs in the state the last 4 out of 6 years. This shows further proof that we’re helping lead the nation by example with our progress and potential, keeping unemployment low and attracting businesses. USAA also recently showed its continued confidence in our area by announcing another 1,000 job expansion at its East Tampa / Brandon facility. When major corporations like this stake their flag in Tampa Bay it just shows that people are paying attention to our economic progress.
The Conference Board’s Leading Economic Index also showed improvement in July, further signaling that the second half of 2017 could show economic growth. The housing sector did bring the index down, but it was offset by the strength in the financial markets, manufacturer’s new orders and consumer sentiments.
What Will Happen With Real Estate Values?
Why will real estate values go up this next full cycle? Because the market options that are left for sale are not the highest quality options that have already been absorbed, and yet sellers are still asking top dollar due to steady demand in location. What does that mean in the future, from a value and appraisal standpoint?
Once the high quality product is gone and all we’re selling is the remaining product, then developers will build new product and the values will be reflective of sold comps that are inferior to the new product, which will push values up. Cap rates should remain steady on investment grade product and property values should grow moderately, but rental rates will be inflated on leased product and will subside if egregious deals are done. Be careful of some select leases signed in this market that will need to be renegotiated in a few years.
Call Fortress Commercial Real Estate, so we can talk expert advice on where your real estate strategy should be focused in West Central Florida. Fortress CRE adds value to business owners looking to grow through their real estate, office and building needs.
Contact us online, call us at 813.444.3330 or email us at kostas@FortressCRE.com for more sound advice.