Home builders and other investors with plenty of cash reserves have the opportunity of a lifetime to buy lower-priced vacant home lots in bulk in Tampa Bay, as there are 27,923 vacant home sites in the five counties that make up the Tampa Bay area – Pinellas, Hernando, Hillsborough, Citrus and Pasco.
Based on a report from research firm Metrostudy, the nearly 28,000 vacant lots in Tampa Bay include multifamily sites ready for residential construction, and it would take builders at least nine years to build homes on these sites at current home building rate. This total number doesn’t even include large areas of lands reserved for new subdivisions. Indeed, there are plenty of residential sites available for residential development.
For home builders with lots of cash, these lots in good locations are gold mines, as they can be acquired at bargain prices and then developed and sold at high profits in the coming years.
Hillsborough County has the highest number of vacant single-family home lots – a total of 9,594. Next is Pasco, which has 6,011 lots that would last for six-and-a-half years. Third is Hernando, which has 3,969 lots that would last for a staggering 45.5 years. Pinellas is fourth with 764 lots that would last for 14 years.
According to housing analysts, the Tampa Bay area is a healthy housing market for home builders if it has a supply of vacant construction-ready home lots equivalent to around 24 months of supply. Only 896 homes were built in the area in the April to June quarter, but nonetheless, it was the best number for the home building sector since the third quarter in 2008 when there were 934 homes built.
In 2009, only 3,090 homes were built in the Tampa Bay area, far below the rate of 8,000 to 10,000 units per year during good times. Home builders that bought their home lots at bargain prices and have sold the homes they built on the lots are among the more successful builders during the downturn.
Nationwide, based on reports from the U.S. Commerce Department, new home sales in June spiked by almost 24 percent compared to the previous month to a seasonally revised annual sales of 330,000, but even so, the sales rate was the second slowest sales pace since 1963. The annual sales pace of 267,000 in the previous month was the slowest pace on record.
To keep their operations running, home builders have been tackling projects besides building single-family homes. According to the National Association of Home Builders, 45 percent of its 31,630 members that specialize in single-family house construction did residential remodeling last year and 15 percent pursued land development. Those with extra funds took advantage of low prices by buying vacant lots for future development.