Saturday, July 26, 2003
Copyright © Las Vegas Review-Journal

LV housing market to remain robust, expert says

This housing tract in southwest Las Vegas is one of many new developments in the area. Photo by Jeff Scheid.

Home prices in Las Vegas will continue to surge and sales will stay on a record pace, a local housing market expert said Friday.

"There is no standing inventory of new homes in this town," said Larry Murphy, president of SalesTraq, a research firm that tracks Las Vegas housing activity.

"We don't have a 30-day supply, we don't have a three-day supply, we don't have a 30-hour supply. The reason I know is I've been in the market (to buy) for six weeks."

Murphy said he purchased a William Lyon home in Summerlin's Topaz Ridge this week, and it won't be ready for occupancy until December.

He knows of a person who slept overnight in his SUV earlier this month to purchase a home in the first phase of a Perma-Bilt residential development in the northwest valley. William Lyon opened Vista Verde in Summerlin on July 5 and sold out the 18-home first phase in two hours.

In the 30-month period from January 2001 through June 30, Murphy counted 55,252 new home permits and 55,791 closings, a net inventory loss of 539 homes.

A midyear housing forecast by Murphy and Steve Bottfeld of Marketing Solutions shows nearly every facet of the Las Vegas housing industry to be on record pace for the first six months of the year.

"The unprecedented drop in permit activity following September 11 created pent-up demand for housing that simply slings prices skyward and propels sales with incredible velocity," Bottfeld said.

Murphy counted 2,001 new home sales in June, a 3.1 percent increase from the same month a year ago. The first half of the year finished down 3.7 percent in total sales at 10, 675.

The median price of a new home for the second quarter was $201,486, compared with $188,288 in the first quarter, a 7 percent increase. The median price of a new home in June was $199,330, up 8.5 percent from a year ago.

Those prices have boosted the resale market, which Bottfeld described as "absolutely sizzling."

Sales of existing homes in June totaled 4,012, a monthly record, and they're 24.7 percent ahead of last year. The median price reached $165,500, a 10. 4 percent gain from a year ago.

"They're flying off the hook," said Karyn Shaunnessy, a Century 21 Realtor in Las Vegas. "It's crazy. Anything that's marked under $200,000, if it's priced right, Realtors can't keep it on the market for a week. I sold one home in two hours."

Shaunnessy said she's seeking out homes being sold by owners, those not listed by a real estate agent, with offers to bring in buyers because there's shrinking inventory in the existing home market as well.

"We can't keep it out there. Our agents are calling to have signs put in the yard, and they're sold before we get there," she said.

One of the trends spotlighted by Murphy in his midyear outlook is the number of baby boomers buying into "age qualified" residential communities.

The three best-selling subdivisions in Las Vegas for the second quarter were Sun City Anthem by Del Webb with 232 closings at an average price of $286,220, Sienna by Sunrise Colony with 132 closings at an average price of $289,440 and Sun City Aliante with 130 closings at an average price of $181,198.

Del Webb recently released findings of its baby-boomer survey that showed an increasing number of retirees (31 percent) saying they were likely to move more than three hours in drive time from their current location.

"I think they did their homework," Murphy said. "They did their surveys and showed there's going to be a lot of people retiring with a lot of money."

Although new home sales are behind last year's totals at the halfway mark, Murphy believes that 2003 will surpass the record of 22,940 sales set in 2001.

Increased numbers of units entering the market -- at 6.54 units per subdivision per month -- means Las Vegas could see several months in excess of 2,000 sales before the end of the year.

Murphy said 26 new subdivisions opened in July, bringing the total to 306 in the valley.