Dec 12, 2023 - News

Luxury home sales surge in Tampa Bay

A patio with two chaise lounges with cream cushions and a dining table overlooking cerulean water and a few high-rise buildings

A rendering shows a patio in Tower II of The Ritz-Carlton Residences. Photo: Courtesy of Related Group

Luxury real estate is having a moment in the Tampa Bay area.

  • Sales of our region's most expensive homes were up 36% in the third quarter of 2023 — the biggest increase anywhere in the country, per a new Redfin report.

Why it matters: We're experiencing a tale of two real estate markets. Affluent folks have the resources to buy and move. But most homeowners are locked into their homes and first-time buyers are sidelined.

By the numbers: The total number of luxury homes for sale in Tampa rose 22.5% from last year, while new luxury listings rose about 14%, according to Redfin.

  • The median-priced luxury home was about $1.3 million, down a few percentage points from last year.

Meanwhile, non-luxury supply was down 17%, and new listings decreased by about 21%. Non-luxury home sales also decreased by about 4%.

  • The median non-luxury home price was $368,000, about a half percent lower than last year.

The big picture: Luxury home sales are up in nearly a third of major U.S. metros, and supply rose 3% across the U.S., per Redfin. Only Las Vegas came anywhere close to Tampa's jump in luxury sales, coming in at about 33%. Austin had the next biggest increase at 14.5%.

  • Non-luxury home sales were down in every major U.S. metro, and non-luxury supply is down 21% overall.

The intrigue: A growing share of luxury buyers are paying cash (43%) or weathering high mortgage rates with plans to refinance later, per the report.

Zoom in: That holds true in Tampa, Redfin Tampa sales manager Eric Auciello told Axios. Cash buyers also have more flexibility when it comes to home and flood insurance, which are both barriers for the average buyer, Auciello said.

Plus: Tampa Bay's luxury market is cheaper than in the northeast or California, places from which Florida attracts transplants.

  • New construction also factors into the luxury market's success, Auciello said. He's seen examples of luxury condo builders, in particular, offering "unheard of" incentives to sell units quickly.
In the foreground, two tennis racquets lean against a basket of tennis balls. In the foreground, a tennis court and first seven floors of Tower II.
A rendering of a tennis court at Tower II of The Ritz-Carlton Residences.

Condos appear to be driving much of Tampa's luxury market boom. In September, sales of condos priced at $1 million or more increased by about 300% from the same time last year, according to Greater Tampa Realtors data cited in a Tampa Bay Times report.

  • Single-family home sales in the same price range increased by just 62%.

Zoom in: One such luxury condo project is The Ritz-Carlton Residences, a set of towers under construction in South Tampa.

  • Tower I is sold out, with its penthouse setting a local record for price per square foot when it sold in 2021, Kurt Drstvensek, managing director of project developer Related Group, told Axios.
  • Tower II, which broke ground last month, is 60% sold. Units start at $1.7 million.
  • The condos offer amenities such as on-demand spa services, in-unit elevators, a sports simulation room, and tennis and pickleball courts.

What they're saying: "A predominant trend that we've identified is the shift among local buyers from traditional single-family homes to condominium living," Drstvensek said, which is "driven by the desire for enhanced services and a diverse range of amenities that aren't readily available in standalone homes."

  • He attributes the overall luxury housing trend in the region to Tampa's "irresistible charm," its walkability, restaurants, job market and waterfront. An international airport also helps.

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