51°F
weather icon Clear

Price gap between new and resale homes nearing $100k in Las Vegas

Updated September 13, 2019 - 6:49 pm

Las Vegas’ housing market has seen fewer sales, slower price growth and a big jump in available listings this year.

Despite the downshift, one thing doesn’t seem to have changed much: The price gap between new and used is still, well, gaping and substantially wider than the national average.

The median sales price of a newly built single-family house in Southern Nevada was around $389,450 in July, compared with $295,000 for a previously owned one, a gap of almost $94,450, according to data from Las Vegas-based Home Builders Research.

Nationally, the median sales price of a new single-family home was $310,400 in June, compared with $288,900 for a resale, a gap of $21,500, according to figures from the National Association of Home Builders.

(Wes Rand/Las Vegas Review-Journal)
(Wes Rand/Las Vegas Review-Journal)

Of course, prices vary for new homes and resales and depend on such factors as size, location and condition. Also, buying new isn’t always the pricier route, as you can find resales in, say, Summerlin that cost more than what builders are offering in other parts of the valley.

But at median levels, the price gap between new homes and resales widened in Las Vegas as the economy spiraled, and it hasn’t slimmed down yet, even as the gap narrowed nationally.

Overall in the U.S., the price gap was about $20,000 for three or four decades before it peaked at $80,000 to $100,000 over the past few years and then shrank in the past several months as mortgage rates climbed, according to Robert Dietz, chief economist at the National Association of Home Builders.

Coming out of the recession, the price difference widened as developers focused on bigger, more expensive houses, Dietz said. He pointed to higher regulatory costs in that period and noted that it’s easier for builders to pass costs along to high-end homebuyers.

In Las Vegas, the gap wasn’t nearly as wide in the early and mid-2000s as it is now. Prices plunged after the economy crashed, though with the valley awash in foreclosures and underwater houses, resale values fell hardest, according to data from Las Vegas consulting firm Applied Analysis.

The bounce-back has been uneven. Builders’ sales prices have blown past pre-recession peaks, but resale prices are still below their bubble-era highs.

The result: The median price of a new home has been more than $100,000 above that of a resale since 2013, according to Applied Analysis, whose figures encompass single-family homes, condos and townhouses.

Applied Analysis co-owner Brian Gordon said new homes in Las Vegas tend to be an average of about 500 square feet larger than previously owned dwellings. New-home prices also account for land, material and labor costs, and Gordon said the megaprojects in town are putting upward pressure on construction workers’ wages.

Land prices also have been climbing, and as long as dirt keeps getting more expensive, so will new houses, Home Builders Research President Andrew Smith said.

The yawning price gap doesn’t help builders, as it can give buyers a big incentive to shop for a resale. But both sides of the market have tapped the brakes this year.

Nearly 7,770 houses were on the market without offers at the end of August, up 33.5 percent from a year earlier, according to the Greater Las Vegas Association of Realtors, which pulls data from its resale-heavy listing service.

Moreover, builders closed 5,042 sales of single-family homes in Southern Nevada this year through July, down 5 percent from the same period in 2018, Home Builders Research reported.

Smith, however, said the builders’ sales drop isn’t “alarming.” Despite the price gap, demand is there.

“People are still buying new houses,” he said.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.

Don't miss the big stories. Like us on Facebook.
Business Videos
Binion's debuts a spinning bar overlooking Fremont Street Experience
Binion's debuted its spinning bar inside the Whiskey Licker Up Saloon. The Rotating bar only goes at one full rotation per 15 minutes overlooking the Fremont Street Experience. (James Schaeffer/Las Vegas Review-Journal)
Southern Nevada could set a new resale-price record in coming months.
The median sales price of previously owned single-family homes – the bulk of the market – was $310,000 in September. Before the economy crashed last decade, prices peaked in June 2006 at $315,000, according to the Greater Las Vegas Association of Realtors.(Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
Walmart container park in Henderson - VIDEO
Henderson could be home to a container park associated with a Walmart Inc. initiative. (Las Vegas Review-Journal)
Recession lessons could help Las Vegas face next slump - VIDEO
While the last economic downturn had a dramatic impact on local casinos, most experts expect the industry will be better able to weather the storm during the next recession. (Mat Luschek / Las Vegas Review-Journal)
MGM and victims of Oct. 1 reach settlement agreement - VIDEO
MGM Resorts International and lawyers representing potentially thousands of victims of the Oct. 1, 2017, mass shooting on the Las Vegas Strip have reached a tentative settlement of between $735 million and $800 million. (Mat Luschek /Las Vegas Review-Journal)
Live music and EDM dominate the night on day 2 of A’Le’Innstock
After sunset bands rocked the crowds at A’Le’Innstock in Rachel, Nevada on the second night of the event.
iPhone 11 Release
Local Las Vegas long time Apple product consumer shares her excitement for the new iPhone 11 release Downtown Summerlin. (Elizabeth Page Brumley/Las Vegas Review-Journal)
Lihi Levin talks about a mobil app Dropit - VIDEO
Lihi Levin, regional manager at Dropit Shopping, talks about a mobil app Dropit. The app lets customers leave their shopping bags at a store then have them delivered the same day to their home or hotel so they can shop without carrying multiple bags all day. (Bizuayehu Tesfaye Las Vegas Review-Journal) @bizutesfaye
North Las Vegas company prepares for Mars - VIDEO
Robert Bigelow and his Bigelow Aerospace manufacturing facility played host to eight NASA astronauts and 60 engineers this week getting to know the company’s B330 autonomous, expandable space station. (Elizabeth Brumley/Las Vegas Review-Journal)
Las Vegas developer talks about a new apartment complex called “the yoU”
Frank Marretti lll, founder of G2 Capital Development, talks about his new apartment complex called “the yoU” near UNLV. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
Steel cables will hoist roof at Allegiant Stadium - VIDEO
Stainless steel cables are being put into place at Allegiant Stadium to begin the process of putting the roof on the 65,000-seat stadium in Las Vegas. Stadium Chief Operating Officer Don Webb explains how the cables will be used to get the roof put on the future home of the Raiders and UNLV football. (Heidi Fang/Las Vegas Review-Journal)
The last remaining Sigma Derby game in Las Vegas
Derek Stevens, owner of the D Las Vegas, talks about the last remaining Sigma Derby horse racing game in Las Vegas inside his casino floor. (Erik Verduzco/Las Vegas Review-Journal)
Popeyes Spicy Chicken Sandwich Review
Janine Blake of Las Vegas gives her review of the new Popeyes Spicy Chicken Sandwich at the restaurant’s location on west Bonanza Road on Thursday, Aug. 22, 2019,
SuperZoo 2019 takes over Mandalay Bay in Las Vegas
SuperZoo 2019 show for pet retailers brought pet products of all description to the Mandalay Bay Convention Center in Las Vegas. (Heidi Knapp Rinella/Las Vegas Review-Journal)
MSG Sphere at The Venetian to cost $1.2B plus
Scheduled to open in 2021, it is expected to be busier than Madison Square Garden in New York. (Michael Quine/Las Vegas Review-Journal)
Favorite products from SuperZoo 2019
Some of the fun and interesting pet products on display at the SuperZoo in Las Vegas at the Mandalay Bay Convention Center. (L.E. Baskow/Las Vegas Review-Journal)
MAGIC Convention Day 3
The fashion trade show MAGIC, held Monday through Wednesday at the Las Vegas Convention Center. (Elizabeth Brumley/Las Vegas Review-Journal)
MAGIC Las Vegas - Day One
The biannual MAGIC convention show opened Monday at the Las Vegas Convention Center. (Elizabeth Brumley/Las Vegas Review-Journal)
Allegiant celebrates naming deal with tailgate party
Allegiant Air employees celebrate with a tailgate party after the company’s naming deal with the Raiders for the new Las Vegas stadium.
Nevada's sportsbook operators welcome competition
Sportsbook operators from near and far are looking to get into in the established Nevada market, experts say. (Las Vegas Review-Journal)
Get a first look of MSG Sphere construction in Las Vegas
Representatives of The Madison Square Garden Company give the first glimpse of progress Tuesday of the under-construction MSG Sphere — a first-of-its-kind performance venue with high-tech audio and visual capabilities.
THE LATEST
MGM parking plans for Route 91 site hark back to earlier use

MGM Resorts International announced this week that the site of the 2017 mass shooting would be used for parking until a planned community facility is built. The property’s previous owner, Circus Circus Enterprises, had used it for employee parking in the 1990s.