The Tampa Bay waterfront market is experiencing an unprecedented surge in property demolitions following last year’s hurricanes, with one barrier island alone potentially facing more than 800 demolition permits, according to local real estate expert AL Bennatti Jr. This widespread reconstruction is changing the coastal real estate landscape and driving new market dynamics.

“I heard that in Treasure Island, there’s over 800 demolition permits. Now, I haven’t confirmed that myself, but I have a friend of mine that told me who’s got some connections with the city,” said Benatti, an associate with RE/MAX Action First who has extensive experience in property renovation and hurricane recovery. Having remodeled 240 properties throughout his career, Benatti is well-versed in the challenges of substantial damage assessments.

The scale of destruction left most waterfront communities uninhabitable in the immediate aftermath. “You have to understand that initially, when the hurricanes happened here on the beaches, 80% of our homes were not inhabitable, 80%,” Benatti explained. This created an acute crisis still felt in the market today.

The demolition surge is driven by Florida’s substantial damage regulations. Properties classified as substantially damaged must be either brought up to current building codes or demolished. “If you want to buy houses that have been flooded out, that are considered, quote, unquote, substantially damaged. In other words, unless you can get that value of the structure up, it has to be removed or leveled,” Benatti noted.

Severe construction delays and quality issues have followed. “The hardest thing in our area after the hurricanes is finding good quality people to do work because they’re all so busy, and you have to wait so long to get work done,” Benatti observed. This labor shortage impacts both large-scale reconstruction projects and basic home improvements needed to prepare properties for sale.

Timing has been critical for property owners looking to maximize returns. Those who acted quickly benefited the most. “Those people that were able to get their houses renovated and back on the market immediately, as soon as they possibly could, and I had a couple clients that I helped get their houses done so they got done and on the market before the market became flooded with homes that have been remodeled, and we got top dollar.”

This quick turnaround led to significant value differences. “You’re talking about a couple of 2000 square foot houses that went for $2 million where, right now, there’s one on our beach that’s 3200 square feet, fully remodeled, great water, and it’s on the market for $1.5 million,” Benatti explained, showing how market conditions shifted rapidly as more renovated homes became available.

The contractor shortage is affecting everyone, especially newcomers. “A lot of the people that are coming down here from Ohio, they have no contacts. They have no contacts to get work done,” Benatti noted, pointing out the particular difficulties for those new to the area.

For sellers, Benatti advises focusing on essential improvements rather than major renovations. “Getting basics done, like flooring, painting, landscaping, you know, getting things of that nature done just so that when a buyer comes in, they don’t feel like they’ve got so much work to do.”

The challenge of reconstruction extends to entire communities. “Imagine trying to get contractors to do work on 80% of our houses all at one time,” Benatti said, highlighting the logistical difficulties of rebuilding so many properties simultaneously across barrier island neighborhoods.

For investors, the demolition trend offers opportunities to those able to navigate the complexities. Benatti has taken advantage of the situation himself. “I bought three flooded out homes that I’m just turning around and flipping because I was able to get them at the right time, and I got them so inexpensively.”

Nearly a year after the hurricanes, reconstruction efforts are ongoing. Many properties remain in various stages of repair or demolition, and the market continues to adjust to the scale of the rebuilding process that is reshaping Tampa Bay’s waterfront communities.