Las Vegas’ economy was on solid ground last year, and out in Summerlin, homebuilders were busy.
Howard Hughes Corp., developer of the massive master-planned community, sold the most residential land and fetched the highest price for dirt there in years. Homebuilders also found plenty of buyers, keeping Summerlin among the top-selling communities in the nation.
But with fears of the coronavirus upending daily life in Las Vegas and across the U.S., the homebuilding market, like other industries, faces a scary stretch ahead.
Las Vegas, along with other cities, has been shutting down the past few weeks in an effort to contain the virus’ spread, putting a huge portion of local jobs at risk. Casinos have closed, conventions have been canceled or postponed, and retailers have locked their doors.
Homebuilders’ sales in Southern Nevada will almost surely tumble if businesses remain closed for a lengthy period. And while Summerlin is known for drawing buyers who earn bigger paychecks, there’s no reason to think it would be immune from the turmoil, given the valley’s heavy dependence on tourism to fuel the economy and that industry’s rapid shutdown.
Hughes Corp. executive Kevin Orrock, Summerlin’s president, said in a statement to the Review-Journal that given the “complex global nature of this event,” it is too early, with too many unknowns, to make “any kind of market projections.”
The turmoil comes on the heels of a strong year in Summerlin, which spans 22,500 acres along the valley’s western rim and boasts more than 100,000 residents.
Hughes Corp. sold around 319 acres of residential land there in 2019 at an average price of $659,000 per acre. In 2011, after the housing market had crashed, it sold 84.5 acres of residential land in Summerlin at an average price of about $366,000 per acre, securities filings show.
Last year, it sold several tracts of desert along the north side of Far Hills Avenue just west of the 215 Beltway. Records show builders now control around 150 acres there, with plans on the books for some 1,100 homes.
Overall, the fallout from the virus’ outbreak has been swift. Who would have thought that casinos up and down the Strip would all be closed for at least a month at the same time?
If the closures persist, Las Vegas’ job losses could be unprecedented — and if they are, homebuilders will be in for an eerily quiet year.