Homes By WestBay tackled a region’s shortage of affordable housing with a townhome product. The move has exceeded expectations.
Homes By WestBay made quite a name for itself in 2019. In fact, it made two.
Not only did the privately held, Riverview-based homebuilder achieve its goal of bringing in just under $250 million in revenue in 2018, but it also launched a new brand called Casa Fresca Homes, which targets less-affluent homebuyers.
“It’s an attainable brand,” Homes By WestBay President Willy Nunn says. “And it’s a little more focused on aesthetics than some of the other offerings in the same price range.”
“If we can average 50-60 sales per month, we are doing well. But lately, we’ve had three different months where we’ve been over 70.” Willy Nunn, president of Homes By WestBay
Priced around $190,000 to $200,000, the Casa Fresca product represents Homes By WestBay’s foray into the townhome market. The company plans to build them at Hawkstone, a new master-planned development in Lithia, as well as Starkey Ranch in Odessa and Riverstone in Lakeland.
By appealing to younger buyers who might have been priced out of the single-family home market, Nunn anticipates the Casa Fresca brand will provide further fuel to his company’s second-half growth surge. During the early months of 2019, “we were trying to come out of a fourth-quarter slump,” he says.
“The market was soft in the fourth quarter of 2018. The first quarter of 2019 was OK but not great. But since August, we’ve been selling really well. If we can average 50-60 sales per month, we are doing well, but lately, we’ve had three different months where we’ve been over 70.”
Due to the late-year uptick, Nunn expects Homes By WestBay to end 2019 with a 10% increase in revenue over 2018. The company is already one of the fastest-growing builders in the Tampa Bay region, with revenue rising 52.2% since 2015, from $127.78 million to $194.55 million in 2017.
And things are primed to get even better, considering the recent drop in interest rates. Nunn forecasts 15% growth in 2020. “Rates drop, and activity improves,” he says. “You can’t get around that. And a lot of what we’ve been selling lately won’t deliver until 2020. So we are going to have a significant backlog.”
Despite that bullish outlook, Nunn remains “a little bit cautious” about a slowdown in the economy in 2020 because of a supply-demand imbalance. On the flip side, Florida, with its many positive trends, could turn out to be largely immune from a downturn in the U.S. economy.
“Florida is very popular, and Florida’s growing a lot, and Tampa, Orlando and Jacksonville are capturing a lot of that growth,” Nunn says. “To the extent that there is any kind of slowdown, I think it’s going to be very minimally felt in the Tampa Bay area, but we are still managing the company very practically.”
That means seeking opportunities in counties like Polk and Manatee that are likely to see spillover population growth as the cost of living in the Tampa Bay region continues to rise. “We see a lot of future growth coming out of Manatee County, Lakeland and east Pasco County,” Nunn says. It also means a solid mix of developing new communities and building in established areas that have the in-demand amenities — premium grocery stores, good schools, etc. — for which buyers will pay top dollar.
“There’s a real shortage of quality homes in quality communities that are well located,” Nunn says. “And we have that. That’s been really good for WestBay, particularly in the higher price points. We've had some really good openings, particularly in the $500,000-$600,000 range. We’ve done well with our new communities as well as new phases in existing communities.”
With Casa Fresca, the firm is poised to be a player at lower price points as well. Nunn says the October grand opening of Casa Fresca sales at Triple Creek, a community in Riverview, was an undisputed triumph, with 20 sales in a single weekend.
“By the following Thursday, they were all gone,” he says. “And that was just the first phase. During the second release, we sold 11 in a single weekend. That’s fast. There’s deep, deep demand.”