Las Vegas homebuilders landed record-high prices yet again last month as strong demand and supply-chain woes show no signs of ending anytime soon.
Buyers paid a median price of $444,677 for newly built homes in Southern Nevada in November, up 11.5 percent from a year earlier, Las Vegas-based Home Builders Research reported.
This marked the sixth time in 2021 that the monthly median closing price set an all-time high, the firm said.
Builders closed 1,054 new-home sales in November, up 26 percent from the same month last year, bringing the year’s sales total to 10,915, up 17 percent from the same 11-month stretch in 2020.
After a buyer signs a sales contract, it can take several months before the home is finished and the purchase can close. Single-family houses account for the bulk of builders’ sales in the Las Vegas Valley.
Southern Nevada’s housing market accelerated this year with rapid sales and record prices, fueled largely by rock-bottom mortgage rates that have let buyers stretch their budgets. The valley also has seen more out-of-state buyers than usual during the pandemic as people sought more space amid widespread work-from-home arrangements.
On the resale side, buyers have showered houses with offers and routinely paid over the asking price, while homebuilders have put buyers on waiting lists, taken bids for lots, regularly raised prices and in some cases even drawn names to determine who gets to buy a place.
Home Builders Research President Andrew Smith wrote in his report that builders face “numerous challenges” as they try to “fulfill the continued strong buyer demand.”
Builders have faced higher materials costs and delivery delays amid widespread supply-chain disruptions, helping fuel higher prices for house hunters.
Despite increased sales across the United States, affordability “remains a major concern,” Danushka Nanayakkara-Skillington, assistant vice president of forecasting and analysis at the National Association of Home Builders, said recently.
Builders’ challenge next year “will be dealing with higher input costs while making sure home prices remain within reach for American home buyers,” she said.
Southern Nevada builders are still pulling an increased tally of permits, indicating a growing pipeline of construction plans.
A total of 1,293 new-home permits were issued in the region last month, up 28 percent from November 2020, bringing this year’s permit tally to 13,774, up 32 percent from the same 11-month period last year, according to Home Builders Research.
Nationally, the pace of builders’ single-family home sales last month was up 12.4 percent from October but down 14 percent from November 2020, federal officials recently reported.
Kwame Donaldson, senior economist with listing site Zillow, said last week that house hunters who are “frustrated with lost bidding wars” on the resale market are finding options in new construction.
“But they must be patient,” he noted.
Last year, builders needed about seven months to finish the average new home. This year, supply-chain disruptions and labor shortages have likely pushed the waiting period to record highs, Donaldson said.