Year to end with second-best new home sales since pandemic

Las Vegas new-home prices softened a bit in November with net sales dipping to their lowest level since January 2023, but there were enough to pass the 2023 yearly total by more than 500 and make it the second-best sales year since the pandemic — leading to the percentage of new-home sales of the overall marketplace approaching a record year, according to Las Vegas-based Home Builders Research.

New home net sales (new sales minus cancellations) dipped to 744 in November, down 8.5 percent from the 813 in November 2023, Home Builders Research President Andrew Smith said. But there’s good news in that the 2023 mark of 10,529 has already been surpassed and 2024 will be the second-highest sales year since the pandemic when there were 12,902 net sales in 2021. There have been 11,086 net sales through November this year.

Elevated interest rates might be contributing to the year-end decline.

During November, Smith said the average 30-year mortgage rates remained around 6.7 percent but the environment could be improving with this past week’s quarter-point cut of the federal funds rate by the Federal Reserve, he added.

“It may bring rates down further, although many sources speculate there is a higher likelihood that rates will hold relatively steady in the first quarter of 2025 and perhaps beyond,” Smith said. “As of the beginning of December, mortgage refinance demand also rose 27 percent week to week and 42 percent year-to-year, but overall volume still remains relatively small.”

New-home closings, which are a lagging indicator of net sales, saw 1,034 closings in November, a 12 percent increase from November 2023. The 2024 total of 11,306 is running 11 percent higher than 2023 through November.

Builders cut back slightly in taking out building permits with their November total of 894 down 3 percent from November 2023.

The 2024 total of 11,807, however, is a 10 percent year-to- year increase from 2023 through November, Smith said.

Amid the net drop in net sales in November, prices stopped escalating from October.

The median new home closing price for all product types was $516,846 in November, an 8 percent increase from November 2023 but down from the $522,990 in October.

For single-family detached homes, the median price was $551,102, an 11 percent increase from November 2023 but down from the $564,950 in October.

For attached product types, the November new home median closing price was $387,058, 2 percent higher than November 2023 but down from $390,368 in October.

The drop in sales prices comes as Smith cited the Urban Land Institute’s Home Attainability Index putting Las Vegas as the 11th least affordable city in the country with 18 percent of homes on the market for sale deemed affordable for a four-person household. Shortage of both affordable and overall housing units are cited as driving factors, he added.

Smith highlighted a report from John Burns Real Estate Consulting citing how the premium to buy a home versus renting is 67 percent. Renting will save $1,287 per month on average, with a median rent of $2,000 ranking Las Vegas third in the country among the top 20 housing markets when it comes to the amount saved per month by renting instead of owning, he said.

The lack of inventory on the resales market continues to push buyers to the new-home sector. The new-home market share in terms of overall closings in November was 31.9 percent — the highest share since December 2022 when it was 34.3 percent, Smith said.

“It now seems certain that local builders will improve upon last year’s 26 percent market share of home closings and will possibly be at a record high going back to at least 1991,” Smith said.

Builders opened five new product lines in November and brought 347 lots to the market, Smith said.

KB Home accounted for three of the five with Catalina in the southwest valley near Russell Road and Conquistador Street featuring three detached products averaging 2,102 square feet, and the Landings and Reserve collections at Alton in Summerlin, also detached products.

Taylor Morrison’s latest town home offering, Lark Hill, also opened in Summerlin with 105 lots and prices starting at $484,900, Smith said.

Smith reported D.R. Horton was November’s top-selling builder with 165 net sales. Two other builders — Lennar and Pulte Group — also surpassed 100 net sales for the month.

The top three selling individual communities in November were all town home projects from D.R. Horton. They are Tempo Trails in the southwest valley with 21; Kalea Trails in North Las Vegas with 18; and Tribute Trails in the Skye Hills area of the northwest with 17, Smith said.

There were 771 single-family detached closings in November, 16 percent more than a year ago, Smith said. The 2024 total sits at 8,374, 10 percent higher than 2023 through November.

Attached products closed 263 units in November, 0.4 percent more than in November 2023. The 2024 total of 2,931 is 15 percent higher than 2023 through November, Smith said. The market share for attached new home products in November came in at 25 percent, in line with the overall figure for 2024.

Some 16.7 percent of new home closings in November were cash transactions, unchanged from October, Smith said. Of those that were financed, the average loan amount was $460,640, down slightly month-to-month. The largest loan for a new home closing in November was $3 million by C3 Bank, for a home in the Caprock collection at Ascension in Summerlin from Pulte Homes.

On the land acquisition front, Smith said builders added more than 42 acres of land in November as they continue to accumulate smaller parcels. Richmond American acquired 15 acres from four separate transactions on South Durango Drive at Windmill Lane.

The two remaining vacant land purchases took place in Lake Las Vegas in Henderson as Pulte Group added more than 17 acres along Lake Las Vegas Parkway, signaling a new project for them apart from what Smith called “the very successful” Del Webb at Lake Las Vegas age-restricted project, which opened in 2020. Century Communities also added a small parcel that Smith said looks to be an expansion of their active community, The Bluffs.