Builders land record home prices in Las Vegas as sales totals fall

Builders are selling houses in Southern Nevada at record-high prices — and their sales totals are falling as buyers face high costs in a shaky economy.

Homebuilders logged 810 net sales — newly signed sales contracts minus cancellations — in Southern Nevada in March, down 39 percent from the same month last year, according to a new report from Las Vegas-based Home Builders Research.

Builders also pulled 1,001 new-home permits in March, down 25 percent from a year earlier, indicating a sharp drop in construction plans.

Overall, builders closed 942 home sales in March, down 10 percent year-over-year, and fetched a median price of $530,000, up 9.6 percent, according to Home Builders Research, which noted the median sales price was the highest it has ever reported.

After a buyer signs a sales contract with a builder, it can take several months before construction of the house is finished and the sale closes.

All told, the data seems to point to a shrinking pool of buyers who, amid high mortgage rates and economic volatility, are able or willing to pay for increasingly expensive newly built homes in Southern Nevada.

‘Seems rather drastic’

Home Builders Research President Andrew Smith wrote in the report that permit activity has been trending downward over the past two years, and that while the overall drop in net sales “seems rather drastic,” per-community average weekly sales rates “remain solid.”

He also noted that builders keep slowly raising their base asking prices, and that the overall conversion rate at which buyer traffic results in sales remains on par with last year and higher than in 2023.

Nationally, builders have increased sales amid sliding prices but have slowed construction.

Across the country, the pace of sales for new single-family homes in March jumped 6 percent from the same month last year, while the median sales price fell 7.5 percent, federal data shows.

At the same time, the pace at which builders started construction on single-family homes fell in March dropped 9.7 percent from a year earlier.

‘Affordability pressures are intensifying’

Buddy Hughes, chairman of the National Association of Home Builders, said the U.S. sales numbers show there is still demand in the market.

But he also said the drop in housing starts was a “clear signal that affordability pressures are intensifying.”

He indicated that elevated mortgage rates and rising construction costs are making it increasingly difficult to deliver homes at prices that entry-level buyers can afford.

As he put it, demand is softening as more potential homeowners are “priced out of the market.”

All told, the spring homebuying season this year is “lackluster” as record-high housing costs and widespread economy instability keep would-be buyers at bay, listing service Redfin reported this week.

On the resale side in Southern Nevada, more homes traded hands in March as compared to a year earlier, even amid rising prices, although available inventory soared.

Buyers picked up around 2,140 previously owned single-family homes in March, up almost 3 percent from the same month last year, and paid a median price of $485,000, up more than 4 percent, according to trade association Las Vegas Realtors.

Still, more than 5,400 houses were on the market without offers at the end of March, up 63 percent from a year earlier, the group reported.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342.