Wells Fargo economist says smartphones are driving people to move to downtown Tampa and downtowns everywhere – Tampa Bay Business Journal
The boom in downtown housing can be traced to your phone, according to Mark Vitner, senior economist for Wells Fargo Securities Economics Group.
“What we are seeing is that a larger proportion of people — millennials, boomers, Gen X-ers — all want to live in the downtown area. What’s driving that is the smartphone,” Vitner said during a May 24 conference call on the mid-year 2018 Florida economic outlook.
Downtowns everywhere are feeling the impact, including in Tampa. Nearly 4,000 residential units have been built in downtown Tampa since 2012, more than 3,200 are under construction and another 6,000 are planned, Tampa Bay Business Journal recently reported.
There’s data that indicates suburbs are growing faster than downtowns, and that’s true in Tampa as well, Vitner said.
“But like a lot of other places, there’s a lot of interest in living downtown, because traffic has become a big problem in Tampa,” he said.
Vitner sees downtowns as the trend to watch. People want to live in places where there are more things to do, and the prevalence of smartphones makes users more aware of activities around them and makes it easier to take part in those activities, he said.
“If you go to a restaurant and it’s slammed, and you want to go to another one you can find it very quickly. You can get an Uber or Lime bike or whatever you want, and you can make that happen. If you want to see what shows are going on, you can find them and buy your tickets with your phone,” he said. “There are a lot more things to do in big cities than in small cities. So not only have we seen a move back to the cities, we’ve seen a larger move back to the big cities.”
Overall, Florida’s economic growth continues to outpace the nation, although Hurricane Irma put a crimp in growth last fall, Vitner said.
He credits some of the growth to diversification. While tourism contributes more to the state’s economy overall, Florida is one of the largest manufacturing states in the U.S., and much of the manufacturing sector here is in higher value-added products.
That’s a strong influence on the state’s economy, particularly in central and south Florida, he said.
The Tampa-St. Petersburg-Clearwater metropolitan statistical area took longer to get over the housing slump than other parts of the state, but for the last two years, the Tampa MSA has been among the strongest of the Florida metro areas, with job gains and population growth, Vitner said.
The Tampa metro area had the 10th-largest population gain in the United States in 2017 compared to 2016. Only the Orlando and Jacksonville metros — No. 2 and No. 9 respectively in the nation — outpaced Tampa in population gains.
Orlando and Jacksonville also had slightly higher year-over-year job growth than Tampa did in 2017. Orlando’s job growth was 3 percent, Jacksonville’s was 2.7 percent and Tampa’s was 2.6 percent, the Wells Fargo report said. The Miami metro’s job growth was 1 percent in 2017.
“When you look at the number of younger people, prime working-age adults, moving to Florida, more often than not their destinations are in central and northern Florida as opposed to south Florida right now,” Vitner said.
But Vitner said he doesn’t have a good measure of under-employment — people working in a coffee shop, for instance, who would rather work in an IT job and have the skills to work in an IT job.
“I think it’s fairly considerable in Florida, given that a large part of the employment base is in lower-paying administrative jobs or in hospitality and retail,” he said.
All over the country, there’s been rapid growth in high-end jobs and in low-end jobs, but not a lot in the middle, and that’s especially true in Tampa and Jacksonville, he said.
“Both of those cities tend to have a lot of administrative-type jobs and that’s where people have been taking the cost out, that’s where automation has been most significant,” Vitner said. “One of the byproducts of that is that people working in those jobs — not entry level jobs, but jobs they took for a short time until they could find something more permanent on their career path — they’re finding themselves stuck because it’s hard to make the leap from a low-paying job to a high-paying job.”
Florida’s real gross domestic product — an inflation-adjusted measure that reflects all the goods and services produced by an economy in a given year — was 2.2 percent in 2017, and Wells Fargo Securities, a unit of Wells Fargo & Co. (NYSE: WFC), is projecting it will be 3.6 percent for 2018 and 2019, and 2.5 percent for 2020.
That’s a higher rate than nationwide. Wells Fargo’s U.S. economic forecast calls for 2.9 percent GDP growth in 2018 and 2.8 percent in 2019.
While there’s no projection nationally for 2020, “We don’t see a recession around the corner. We have the economy continuing to grow in 2020,” Vitner said.
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