DR Horton has purchased 63 acres of residential land in Henderson for $8.6 million, one of several land acquisitions by the Fort Worth-based home builder in the past few months.
The land near Horizon Ridge Parkway and Gibson Road is planned for 305 residential lots and last sold for more than $60 million in 2006, said Rick Hildreth of Land Advisors Organization.
“It’s a great location. The income demographics in that area are high, and there’s a limited supply of land because you’re butting up against the mountains,” the land broker said. “They’re going to do great. They hit a home run.”
DR Horton also closed escrow on 275 lots in the Whitney Mesa Estates of Henderson in May for $7.5 million and picked up 10 acres of bank-owned land in northwest Las Vegas, Hildreth said.
“We are very happy with our new acquisitions and look forward to delivering great homes to the area of Henderson where we have recently made these acquisitions,” said Brad Burns, president of DR Horton’s Nevada operations.
Home builders haven’t bought land at the pace they did in the past, and many builders dumped their land holdings during the recession, Hildreth said. As new-home sales ticked up in Las Vegas this year, builders began eating through their supply of finished lots, he said.
Rob McGibney, division president of KB Home in Las Vegas, said his company is down to a half-dozen active subdivisions in the valley. The No. 1 builder in Las Vegas last year just closed escrow on two parcels in the northwest and 24 bank-owned lots in the southwest, he said.
Hildreth said home builders need to create new “storefronts” to sell homes, and it won’t be long before they start merging into North Las Vegas again.
“They need to diversify their opportunities and open up storefronts in different segments of the market,” Hildreth said.
Residential development is “spotty” in the southwest because of deed restrictions in rural preservation areas and encumbrances from being in the path for McCarran International Airport, he said.
Dennis Smith, president of Home Builders Research, said nearly all of the public home builders are buying land to some degree. They sold off lots during the recession and are now buying them back at pennies on the dollar. DR Horton’s purchase at $136,500 an acre is an excellent deal, he said.
“Sooner or later, someone had to pull the trigger because finished lots are at a minimum,” Smith said. “Builders have been holding back because they don’t want to overspend. How much land do you buy? Are you assuming current absorption will remain constant?”
Home Builders Research reported 401 new home sales in May, compared with 291 in the same month a year ago. Smith said he expects new home sales to climb above 500 in the coming months, based on a rise in weekly net sales per subdivision.
Builders that pulled the most permits in May are Richmond American (109); Pulte-Del Webb (75); Beazer (61); Ryland (52); and Harmony (49).