Saturday, January 08, 2005
Copyright © Las Vegas Review-Journal

Median new-home prices in LV surge again

Dramatic year-to year comparisons expected until second quarter, local housing expert believes

Cecil Lopez works on a Toll Brothers home in November. Las Vegas median new-home prices rose again in November. THE ASSOCIATED PRESS

The median price of a new home in Las Vegas jumped to $284,755 in November, a 36.9 percent increase from the same month a year ago, a local research expert said Friday.

The median price climbed steadily throughout 2004, dipping slightly in October to $272,930.

"We will continue to see these incredibly high year-to-year increases until the second quarter," Home Builders Research President Dennis Smith said. "This is because these are the prices based on actual closings, read from deeds."

The number of new home sales in November was 2,546, bringing 2004's yearly total to 26,045, which already breaks 2003's record of 25,230 sales.

Another record was set in the number of building permits pulled. With 1,733 in November, the permit count for the year grew to 30,959, shattering last year's 25,212.

"Holy moley," Smith said. "The housing market is fine. It's not correcting. There's no bubble. Are we in a slow period? Yes."

Smith said builders will be watching the market to see if it picks up in February and to what extent it picks up.

"I mean sales need to go up by 25 percent to 50 percent. If they don't, then we could be in for a softer year than all of us want to see," he said. "Every builder I talked to these last few weeks, they all say the same thing. We're just waiting to see what happens."

The median price of a resale home has been hugging the $250,000 mark for the last four months, coming in at $249,000 in November.

That's up $71,000, or 39.9 percent, from a year earlier, which is similar to the increase for new homes.

Existing-home sales totaled 4,374 in November, pushing the year-to-date number to 59,839, a 33.3 percent increase.

Smith said there's a lot of concern about the resale inventory. The number of new listings has declined after peaking at about 16,000 in September.

"Is it because people are actually selling their homes or just pulling them off the market? That means they could put them back on the market in six months. If that happens, we could see another bump up (in inventory)," he said.

The Greater Las Vegas Association of Realtors reported 13,108 available units on the Multiple Listing Service in December, down 12 percent from November. The number of new listings for the month was 3,183 and the median list price was $324,900.

Everybody kept wondering when the pricing "bubble" was going to burst in Las Vegas and it never happened, Smith said.

"The bottom line is this: Is the price of land coming down?"

Smith said the current price of land for a typical single-family development is approaching $650,000 an acre in many parts of the Las Vegas Valley.

Downtown land has reached $8 million an acre and Strip land is up to $15 million and $20 million an acre.

That's led to the emergence of a "vertical" housing segment in Las Vegas and the "retooling" of the Strip, Smith said.

"How many new high-rise and midrise condominium projects are there going to be on and near the Las Vegas Strip. Twenty-five? Fifty? Seventy-five? It is still hard to tell because it seems lie new ones are announced weekly," he said.

"The bottom line is that the Strip is changing, and this new phase will not only transform our city, but bring a new clientele and their dollars to Las Vegas."