Las Vegas homebuilders see record prices, lower sales

Las Vegas homebuilders are fetching record prices, with buyers writing checks not seen since the bubble years.

But sales totals still are nowhere near their peaks — and it seems no one expects them to reach new highs anytime soon, if ever.

Builders closed roughly 4,300 new-home sales in Clark County this year through June. It was the highest midyear sales tally in almost a decade, according to Home Builders Research, but the pace was still far below that of the white-hot mid-2000s or of the 1990s.

Meanwhile, the peak median sales price from the boom days — about $338,600 in summer 2007 — has been eclipsed twice this year.

The disparity shows that while buyers are paying big prices and new subdivisions keep popping up, construction, at least, remains a long way off from the days when the housing market was so bloated it eventually burst.

Fueling the record prices are rising demand, tighter inventory, higher development costs and a focus on building bigger, pricier homes.

Higher prices are holding sales totals down, but so are labor shortages, a smaller roster of builders and decreased available land. Other factors include Las Vegas’ long recovery from the recession and more-normal mortgage lending that, unlike last decade, doesn’t let practically anyone buy a house, builders and analysts said.

Las Vegas isn’t alone. There is a supply-demand “imbalance” nationally, making for an “unusual period” in the home-construction industry, National Association of Home Builders chief economist Robert Dietz said.

Despite the changed market, sales still are climbing fast in Las Vegas, as the midyear tally was 22 percent above last year’s.

Home Builders Research founder Dennis Smith said he hasn’t been surprised by the pace, adding that he expected sales to climb as the economy and consumer confidence improved.

Plus, after the homebuilding market was wiped out during the recession, there was only one way it could go.

“It couldn’t get any worse,” he said.

New home sales graphic

‘Artificial growth’

Las Vegas grew fast for decades, and by the late 1990s, builders were selling around 20,000 homes a year.

That soared to almost 39,000 sales in 2005 during the bubble and then plunged to just 3,900 in 2011 after it burst, according to Smith’s research.

Annual sales have more than doubled since hitting bottom amid a growing population and rebounding employment. Locals say they expect sales to keep climbing, but to a point.

KB Home’s Nevada division president, Brian Kunec, figures there is enough demand to get back to 15,000 sales but not to the previous peak. “I don’t believe we’ll get there,” he said.

He said lenders aren’t doling out “crazy mortgage products” as they did in years past that would spur “artificial growth.”

And finding enough people to build homes has been difficult. Contractors are “constantly short” on laborers, lengthening the time it takes to deliver a house, said Robb Beville, Nevada division president for Century Communities.

Also, there isn’t enough demand for 40,000 new homes a year, Beville said, but 15,000 is “realistic.”

“It’s an aircraft carrier; this thing does not turn quickly,” he said.

More sales if prices lower

Smith said Las Vegas is at least five years away from 15,000 annual sales, and he recently wrote that it doesn’t seem “at all possible” that sales will ever get back to the levels of the early or mid-2000s.

The number of builders has been slashed. Smith figures there are around 40 homebuilders in the Las Vegas area, down from about 190 before the market tanked.

Land sales are by no means drying up, but the shrinking supply of choice parcels and Las Vegas’ stubbornly high rate of underwater borrowers also are crimping new-home sales, Smith said.

Underwater homeowners, whose mortgage outweighs their home value, can’t easily sell, making them less likely to soon buy again.

Also, it’s “pretty clear” that if prices were lower, builders “would sell more houses,” said Klif Andrews, Las Vegas division president for Pardee Homes.

new home prices graphic

Long recovery

Nationally, builders have been focused on larger, more expensive houses. Locally, they still sell in the more-affordable $200,000 range, but Beville said entry-level homes “disappeared for a few years” because the profits weren’t there.

Among the rising costs this year: Lumber prices are up about 20 percent, economist Dietz said, amid new tariffs by the Trump administration on imported Canadian softwood lumber and wildfires in that country.

Still, low interest rates are helping people buy costlier homes, allowing prices to rise, Andrews said, and a sliding inventory of resales might be pushing house-hunters to construction sites.

Las Vegas also is growing, creating an influx of potential buyers. Clark County’s population rose 10.5 percent from 2010 to 2016, to almost 2.2 million, U.S. Census Bureau data show.

But given how badly Las Vegas got pummeled by the recession, the economy still is recovering or lagging in some ways. And the housing market, like other industries, feels the impact.

“Whoever thought it would take 10 years or more to get out of the recession?” Smith said.

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

ad-high_impact_4
Local
Metro Asst. Sheriff Brett Zimmerman on Aug. 8 officer-involved shooting
Metropolitan Police Department Assistant Sheriff Brett Zimmerman met with media Monday to discuss the details of the 14th officer-involved shooting of the year. (Madelyn Reese/ Las Vegas Review-Journal)
Matt Kelly Elementary School hosted its third annual Back-to-School Red Carpet Program
Matt Kelly Elementary School hosted its third annual Back-to-School Red Carpet Program where community and business leaders joined to welcome students back with an inspirational welcome. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Star Trek fans on show’s enduring popularity
Star Trek fans at the Star Trek Convention 2018 talk about why they think the show has stayed popular across the years Thursday, August 2, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Nonprofit provides clothing for homeless
Sydney Grover of Can You Spare A Story?, talks about how she founded the non-profit organization. (Marcus Villagran/Las Vegas Review-Journal)
Family remembers deceased mother
Family members of Adriann Gallegos remember her. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Camp Broadway teaches kids how to sing and dance
The Smith Center's seventh annual Camp Broadway musical theater program gives 150 kids ages 6-17 an opportunity to learn musical theater skills from industry professionals over a five-day period. Marcus Villagran/ Las Vegas Review-Journal @brokejournalist
Restoring classic Corvettes to perfection
Members of the National Corvette Restorers Society Convention talk about what it takes to earn the NCRS Top Flight Award for a restored Corvette at South Point in Las Vegas on Tuesday July 17, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Watch Ruthless! at Las Vegas Little Theatre
The musical Ruthless! will be playing at Las Vegas Little Theatre from July 13-29. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Cadaver art and sword swallowing at The Dark Arts Market
Curator Erin Emrie talks about her inspiration for The Dark Arts Market at Cornish Pasty Co. in Las Vegas Tuesday, July 10, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
'NO H8' Campaign comes to Las Vegas
Hundreds of locals participate in the NO H8 campaign founded by Adam Bouska and Jeff Parshley as a response to Proposition 8, a California ban on same-sex marriage. The campaign has since evolved to represent equal treatment for all. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
What to expect at Station Casinos' Fourth of July celebration
Station Casinos' is hosting its annual 4th of July celebration with Fireworks by Grucci. Fireworks scheduled to go off on Wednesday, July 4 around 9 p.m. at Green Valley Ranch Resort, Red Rock Resort, Fiesta Rancho and Texas Station. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Star Wars and Golden Knights mashup at downtown art shop
Star Wars and Vegas Golden Knights fans attend the Boba Fett Golden Knight Paint Class at The Bubblegum Gallery in Las Vegas, Friday, June 29, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Tourists and locals enjoy Independence Day fireworks at Caesars Palace
Hundreds of tourists and locals gaze at the Independence Day fireworks show at Caesars Palace on Saturday, June 30, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Clark County recount votes in commission’s District E primary
Clark County staff begin the recount requested by candidate Marco Hernandez in the democratic primary for the County Commission's District E seat on Tuesday, June 26, 2018. (Marcus Villagran/Review-Journal) @brokejournalist
Long-running local hip hop producer wants Vegas rappers to shine
Las Vegas Hip Hop producer and co-owner of Digital Insight Recording Studios Tiger Stylz reflects on 30 years of music production in the city. (Marcus Villagran/Review-Journal) @brokejournalist
"Pawn Stars" fans visit Richard Harrison's memorial at Gold & Silver Pawn
"Pawn Stars" fans from around the world visit the Gold & Silver Pawn Shop in Las Vegas following the passing of Richard "Old Man" Harrison on Monday, June 25, 2018. (Marcus Villagran/Review-Journal) @brokejournalist
Construction for new 51s ballpark underway
New home of the Las Vegas 51s is planned to be finished by March 2019 in Summerlin according to team president Don Logan. (Marcus Villagran/Review-Journal) @brokejournalist
Business
Neon wraps can light up the night for advertising
Vinyl wrap company 5150 Wraps talks about neon wraps, a new technology that the company believes can boost advertising at night. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Nevada on the forefront of drone safety
Dr. Chris Walach, senior director of Nevada Institute for Autonomous Systems, talks to a reporter at NIAS's new Nevada Drone Center for Excellence of Public Safety, located inside the Switch Innevation Center in Las Vegas. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
Motel 8 on south Strip will become site of hotel-casino
Israeli hoteliers Asher Gabay and Benny Zerah bought Motel 8 on the south Strip for $7.4 million, records show. They plan to bulldoze the property and build a hotel-casino. Motel 8 was built in the 1960s and used to be one of several roadside inns on what's now the south Strip. But it looks out of place today, dwarfed by the towering Mandalay Bay right across the street.
Project billed as one of the world's largest marijuana dispensaries plans to open Nov. 1
Planet 13 co-CEO Larry Scheffler talks about what to expect from the new marijuana dispensary, Thursday, July 19, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Oasis Biotech opens in Las Vegas
Brock Leach, chief operating officer of Oasis Biotech, discusses the new plant factory at its grand opening on July 18. (Bailey Schulz/Las Vegas Review-Journal)
UNLV Tech Park innovation building breaks ground
Construction on the first innovation building at the UNLV Tech Park is underway. (Bailey Schulz/Las Vegas Review-Journal)
Caesars Forum Meeting Center
Caesars broke ground Monday on its $375 million Caesars Forum Meeting Center (convention center) just east of the High Roller observation wheel. (Caesars Entertainment)
Technology reshapes the pawn shop industry
Devin Battersby attaches a black-colored device to the back of her iPhone and snaps several of the inside and outside of a Louis Vuitton wallet. The device, installed with artificial intelligence capabilities, analyzes the images using a patented microscopic technology. Within a few minutes, Battersby receives an answer on her app. The designer item is authentic.
Recreational marijuana has been legal in Nevada for one year
Exhale Nevada CEO Pete Findley talks about the one year anniversary of the legalization of recreational marijuana in Nevada. (K.M. Cannon/Las Vegas Review-Journal)
Young adults aren't saving for retirement
Financial advisors talk about saving trends among young adults. (Bailey Schulz/Las Vegas Review-Journal)
President Trump’s tariffs could raise costs for real estate developers, analysts say
President Donald Trump made his fortune in real estate, but by slapping tariffs on imports from close allies, developers in Las Vegas and other cities could get hit hard.
Las Vegas business and tariffs
Barry Yost, co-owner of Precision Tube Laser, LLC, places a metal pipe into the TruLaser Tube 5000 laser cutting machine on Wednesday, June 20, 2018, in Las Vegas. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Nevada Film Office Connects Businesses To Producers
The director of the Nevada Film Office discusses its revamped locations database and how it will affect local businesses. (Bailey Schulz/Las Vegas Review-Journal)
Opendoor isn't the typical house flipping company
Unlike most house flippers, the company aims to make money from transaction costs rather than from selling homes for more than their purchase price.
The Venetian gondoliers sing Italian songs
Gondolier Marciano sings a the classic Italian song "Volare" as he leads guests through the canals of The Venetian in Las Vegas. (K.M. Cannon/Las Vegas Review-Journal)
Building In Logandale
Texas homebuilder D.R. Horton bought 43 lots in rural Logandale. (Eli Segall/Las Vegas Review-Journal)
Indoor farming in Southern Nevada
Experts discuss Nevada's indoor farming industry. (Bailey Schulz/Las Vegas Review-Journal)
Former Fontainebleau could have become a Waldorf Astoria
Months after developer Steve Witkoff bought the Fontainebleau last summer, he unveiled plans to turn the mothballed hotel into a Marriott-managed resort called The Drew. But if Richard “Boz” Bosworth’s plans didn’t fall through, the north Las Vegas Strip tower could have become a Waldorf Astoria with several floors of timeshare units. (Eli Segall/Las Vegas Review-Journal)
LVCVA CEO Rossi Ralenkotter announces plans to retire
Rossi Ralenkotter, CEO of the LVCVA, on Tuesday confirmed a Las Vegas Review-Journal report that he is preparing to retire. Richard N. Velotta/ Las Vegas Review-Journal
Cousins Maine Lobster to open inside 2 Las Vegas Smith’s stores
Cousins Maine Lobster food truck company will open inside Las Vegas’ two newest Smith’s at Skye Canyon Park Drive and U.S. Highway 95, and at Warm Springs Road and Durango Drive. Cousins currently sells outside some Las Vegas Smith’s stores and at Fremont Street and Las Vegas Boulevard. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas home prices to continue to rise, expert says
Lawrence Yun, chief economist at the National Association of Realtors, gives homebuyers a pulse on the Las Vegas housing market. (Eli Segall/Las Vegas Review-Journal)
NV Energy announces clean energy investment
The company is planning to add six solar projects in Nevada, along with the state's first major battery energy storage capacity. Bailey Schulz/Las Vegas Review-Journal
3 Mario Batali restaurants on Las Vegas Strip to close
Days after new sexual misconduct allegations were made against celebrity chef Mario Batali, his company announced Friday that it will close its three Las Vegas restaurants July 27. Employees of Carnevino Italian Steakhouse, B&B Ristorante and Otto Enoteca e Pizzeria, all located in The Venetian and Palazzo resorts, were informed of the decision Friday morning. Bastianich is scheduled to visit the restaurants Friday to speak to employees about the next two months of operation as well as how the company plans to help them transition to new positions.
Nevada has its first cybersecurity apprenticeship program
The Learning Center education company in Las Vegas has launched the first apprenticeship program for cybersecurity in Nevada. It was approved by the State Apprenticeship Council on May 15. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas union members voting to authorize the right to strike
Thousands of Las Vegas union members voting Tuesday morning to authorize the right to strike. A “yes” vote would give the union negotiating committee the power to call a strike anytime after June 1 at the resorts that fail to reach an agreement. (Todd Prince/Las Vegas Review-Journal)
Small businesses struggle to find qualified candidates
A 2018 survey found that over two-thirds of small businesses in Nevada find it somewhat to very difficult to recruit qualified candidates. Bailey Schulz/Las Vegas Review-Journal
TOP NEWS
News Headlines
Add Event
Home Front Page Footer Listing
Circular
You May Like

You May Like