Tampa, FL, April 20th, 2026–Written by Bill Eshenbaugh, ALC, CCIM
As we end the first quarter, gas prices went from $2.59 a gallon to $4.29 a gallon at my local station in a matter of a week. Missiles and drones are flying all over the Middle East. I remember an old saying that “the enemy of my enemy is my friend.” It makes me wonder how the alliances amongst nations of the Middle East, the United States, and Europe determine who is my friend and who is my enemy.
I remember the six-day war in 1967 between Egypt and Israel, the 1973 coming of being of the OPEC organization where the petroleum producing countries decided to raise the price of crude dramatically and the pump price went from $0.25 a gallon $1.50 a gallon in a matter of three months or less. Each of those had a dramatic effect on the supply and demand for petroleum products and consequently had a tremendous impact on inflation and the cost of all goods. By the end of President Carter’s term in 1979, we had the New York prime interest rate at 21%, inflation hovering from 12 to 15%, and in the “Rust Belt”, unemployment approaching 15%.
The impacts of the inflation and the energy costs more dramatic. Off the line- 1972 Ford Crown Vic Sedan was $3800; by 1979, that same vehicle was over $7000. I built a house in 1972 brand new and including the land my costs were $32,000. I sold that house in December of 1982 for $112,000 without many changes. So, you can see that the inflation in a relatively short period of time doubled the cost of a vehicle and almost tripled the value of my house.
Traditionally once the price of petroleum goes way up and then comes down, it hardly ever comes down to where it was before the rise. Most companies take advantage and add on fuel surcharges or raise prices based on the cost of fuel.
When we entered 2026, I was optimistic that we were in a midterm election year and that Congress would do whatever they could to stimulate the economy and that we would have a robust housing year. Just the opposite has happened of course with builders struggling with margins that once were above 30% and now fighting to keep them somewhere around 15%. Now, that might sound awful for public companies, but the truth of the matter is traditionally builders’ margins were somewhere in the mid-teens most of the time and sometimes during really rough periods, they got under 10% and during good periods they got above 30%.
I’ve attended several economic forecasts and outlooks including the national land conference in San Antonio. TX in March. It’s amazing how many speakers forecast that land prices are coming down soon. As we sit here on the cutting edge of land pricing and demand and supply, we don’t see many landowners willing to take much of a haircut. Probably the biggest area of change right now is those with apartment sites who owners may have decided that the pricing that they envisioned in 2023 and 2024 are not achievable in 2026 and so we’ve seen slight downward tweaks in that regard. That market is suffering from a real lack of demand until the current projects are leased up, the current projects cease reducing rents and achieve rent increases and interest rates come down.
Much of this is driven by the fact that the flow of new people to Tampa Bay area has slowed dramatically and the new job creations have slowed as well. As we talk to landowners daily, we find very few of them in the mood of reducing their land prices to reflect what others would like to see in today’s market. The landowners take the position that there’s a scarcity of land and they only have one lifetime opportunity to sell their land for the maximum amount of money. Many of them have said that they might as well wait and see how this economy shakes out and see if the demand comes roaring back. In the meanwhile, one of the biggest constraints on the supply of available land of course is the time it takes to get a property through the zoning process and the growing opposition not only at the political level but at the public level. All you have to do is spend a little bit of time on LinkedIn or Facebook and you’ll find organizations all over the place who want to keep Florida as it has always been and who want to stop all growth, we even have a candidate running for governor as a Republican who says he wants to shut down all development.
I emailed him and asked him how that could be a Republican philosophy given land use rights and opportunities to sell your land and how he as a potential governor could be opposed to landowners enjoying one of their bundles of rights and that’s the right to sell their property for the highest and best use. I haven’t heard back.
In addition to the political difficulty and the timeline to produce new land for development, we’re now entering an election year and that just makes life that much more difficult to judge when to present an application, who’s up for reelection and then how to predict the votes that are necessary at Planning Commissions, City Council or County Commissions? It’s likely many applicants will decide to wait and see the outcome of the elections before appearing in a planning or zoning hearing, which means another several months will be added to the timeline of replenishing the supply.
On a brighter note, our team is experiencing good volume of business in the sale of agricultural land to other land users, and in the sale of retail sites, industrial user sites, and healthcare sites. We invite you to give us a call in Tampa or our new office in Orlando if we can help evaluate property or fill your needs.
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