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Las Vegas home builders start 2022 with record-high prices

Updated March 3, 2022 - 12:14 am

Following the most heated year for housing in some time, Southern Nevada home builders started 2022 with sales prices at record highs.

Builders sold single-family houses in Southern Nevada for a median price of $482,320 in January, up 23.6 percent from January 2021, and condos and townhomes for a median of $348,990, up 25.5 percent, according to a new report from Las Vegas-based Home Builders Research.

The prices are for closed transactions, and both set new all-time highs in January, Home Builders Research President Andrew Smith confirmed Wednesday.

Single-family homes comprise the bulk of builders’ sales in the region.

Overall, builders closed 722 new-home sales in January, up 2 percent from the same month last year, Home Builders Research reported, adding that January is historically the lowest-performing month for closings.

Southern Nevada builders also logged 1,090 net sales — newly signed purchase contracts minus cancellations — in January. That was the highest monthly tally since July but below the sales totals in January 2021 (1,249) and January 2020 (1,116), Home Builders Research reported.

After a buyer signs a sales contract, it can take several months before the home is finished and the purchase can close.

All told, Las Vegas-area builders “continue to operate at full capacity, selling everything they release,” but are also “holding back” on the number of home sites they release amid high buyer demand, labor and supply issues, jurisdictional delays, and “looming” interest-rate hikes, Smith wrote in the report.

Fueled largely by rock-bottom mortgage rates that let buyers stretch their budgets, Las Vegas’ housing market accelerated last year. Houses sold rapidly, buyers paid above the asking price, supply was tight and fast-rising prices reached new all-time highs practically every month.

For their part, builders put buyers on waiting lists, took bids for lots, regularly raised prices and in some cases drew names to determine who could purchase a place. Home builders also faced higher materials costs and delivery delays amid widespread supply-chain disruptions.

Overall, it was increasingly difficult to buy a home in the Las Vegas area last year, more expensive and, some said, increasingly unaffordable.

Across the country, a lack of resale inventory has “sustained” demand for home construction, but higher costs, including for lumber, and limited availability of materials is “making it more difficult for builders to meet market demand,” Jerry Konter, chairman of the National Association of Home Builders, said this week.

KB Home Chairman and CEO Jeffrey Mezger, who leads a national builder with a big presence in Southern Nevada, said in January that while operating conditions last year “were extremely challenging” with labor shortages and supply-chain disruptions, its teams “remained resilient in working through solutions with our trade partners and suppliers.”

Its profits also soared.

KB booked $564.7 million in net income for the 12 months ended Nov. 30, up about 91 percent from the same period a year earlier.

PulteGroup, another national builder with a big presence in the Las Vegas Valley, earned more than $1.9 billion in net income last year, up 38 percent from 2020.

Ryan Marshall, president and CEO, said last month that strong buyer demand is expected to continue.

“Although ongoing supply chain disruptions continue to challenge our industry, we believe that our size, growing community count and an available inventory of new homes have us well positioned to grow our business in 2022 while continuing to deliver exceptional returns,” Marshall said.

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

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