Prominent developer expects another strong year, but significant threats could slow growth.
Company: Metro Development Group
Best known for the Epperson community in Wesley Chapel, which features a 7.5-acre, man-made Crystal Lagoon amenity, the Tampa-based developer is responsible for five of the 20 fastest-growing communities in the Tampa Bay region, according to a study by housing research firm Zonda.
Vaike O’Grady, Metro Development Group’s recently hired vice president of marketing and communications, says the company expects 2022 to be on par with 2021, or better, in terms of sales. That means, in a nutshell, it should be a highly profitable year, thanks to sky-high demand for housing in the Tampa Bay region.
"House prices have gone up so much that if interest rates hike up, even a point, a lot of people are going to be left on the sidelines." — Vaike O’Grady, Metro Development Group’s vice president of marketing and communications
“We will have the lots on the ground to meet our sales goals,” O’Grady says. “We got a little stuck at some points this year because we just ran out of lots to sell. So, I’ll project our numbers to be at a high level into 2023.”
Threats, according to O’Grady, include interest rates and sharply rising home prices. The resale market could also affect sales of newly constructed houses, as buyers are desperate to get into homes as soon as possible and might not want to wait for a new build.
“House prices have gone up so much that if interest rates hike up, even a point, a lot of people are going to be left on the sidelines,” O’Grady says.
Supply-chain challenges continue to disrupt Metro Development Group and other major consumers of building materials in the Tampa Bay region. Shortages and delays became so rampant that Zillow was forced to scuttle its short-lived real estate sales venture altogether, partially because it couldn’t source labor and materials to renovate the houses it had acquired.
“It’s hard to flip houses when you can’t get the renovations done,” O’Grady says, “and the renovations cost so much.”
Growing numbers of young couples and families, O’Grady says, are looking to attached homes, such as townhouses and condos, as starter homes, and she expects that trend to continue in 2022 and beyond. “We’re going to see more of that, not just at entry level, but both ends of the spectrum — retirees, as well,” she says.
Attached homes are a win for both buyers and builders, O’Grady adds. Buyers like the affordability and improvements in construction materials, which minimize sound from neighboring properties; builders, on the other hand, can put more homes on a single piece of land, which boosts their return on investment.
“If you think about it, most of the cost is in the land,” O’Grady says. “It’s a better deal for the builder, and buyers seem willing to compromise as long as they’ve got some green space, like a dog park, and we’ve got plenty of those.”
The other major trend sending ripples of opportunity through the industry is the rise of single-family “build to rent” homes.
“We’re getting ready to bring some of that into our communities,” O’Grady says. “You can do it two ways: Take a regular single-family lot and hold it back as a rental, and then maybe someday sell it, or build it as what we like to call a ‘horizontal apartment.’ It’s operated like it was an apartment, so the lots are maintained, the homes are maintained, but the difference is the renter has a yard of some sort. You’re starting to see more of it here in Tampa.”
— Brian Hartz