Market Trend Tampa, Clearwater, and Saint Petersburg

[David Ramirez]

Hello Everyone, I want to know how everyone is adapting to this new way of working. Here in Tampa I see a lot of investors betting on new construction and rentals, while fix and flips are left behind. I think that there is still a good market for fix and flips but you have to be conservative on the numbers you run for the holding period because with this situation going on there is a lot of people holding on their saving accounts. 

Let me know what you guys think. 

[Colin G Murphy]

Hi @David Ramirez

Supply is incredibly tight in the Tampa market right now and you´re absolutely correct that many experienced flippers are diversifying into new build while others are having trouble finding deals (but selling them afterwards is still easy).

I focus mostly on West Pasco (New Port Richey / Port Richey) and not only is inventory ridiculously low (less than 1 months supply in the sub $200k market!) but median sales prices were 10% higher in June 2020 than they were in January 2020. Perfect illustration of how real estate is a lagging indictor. 

Buy and hold people don´t need to fret too much about that kind of situation as they will come out on top regardless of peaks and troughs as long as they (a) own it long enough (b) have adequate reserves and (c) use good property managers. Flippers and wholesalers need to be more careful that they don´t overexpose themselves. Tightening your underwriting standards as @Ronan Donnelly alluded to is a smart play, but lowering ARVs and extending holding cost assumptions is not so easy when everyone around you is scrambling for deals. 

In short, act like you are driving a car in the fog - keep going, but more carefully than before.