It’s reset time for valley real estate, official says

Las Vegas real estate expert Richard Lee has certainly curbed his enthusiasm about the market in the last couple of years, toning down his fever-pitch presentation about getting his "fair share" when the city was booming.

He used to count the number of high-rise construction cranes in the Las Vegas skyline and was among the first to talk about the "Manhattanization" of Las Vegas.

"It's been an interesting few years," the public relations director for First American Title of Nevada said late Thursday. "How things changed. We had the fastest-growing city in the nation. Now we're No. 1 in foreclosures."

Speaking at a preview of new model homes from American West at Coronado Ranch, Lee asked the gathering of about 300 real estate professionals what they wanted to hear from him.

Did they want him to talk about hope or truth?

"The Pollyanna times are over. We've got to talk about what's real," he said. "It's do-over time. We've got to re-evaluate what we did right and what we did wrong and what we've got to do now."

Lee said he knew there would be an adjustment in real estate values, but he didn't know it would be a 50 percent adjustment downward.

"It's reset time. The opportunity to make more money than we ever have is right now," he said. "I didn't get my share because I didn't have the price of entry. Now it's the reset button, a second chance. All recessions end in recovery and all busts lead to booms."

After 18 months of hibernation, the new-home market in Las Vegas is showing signs of life with a 15 percent increase in sales from a year ago, Lee said. American West is doing even better with a 35 percent increase.

Lee said he hadn't seen a turnout like American West had for Reserve at Coronado Ranch in quite a while. Model previews were an every-weekend event when the valley had some 575 active new-home subdivisions a few years ago. Now the count is down to about 230, Las Vegas-based research firm SalesTraq reports.

Reserve at Coronado Ranch had 12 sales contracts before it opened, said Bonnie Hernandez, marketing director for American West, one of the few private home builders left in Las Vegas.

"We have faith in the Las Vegas market," she said. "These are brand-new floor plans for us. One of the buyers is a first-time buyer. They looked at foreclosures, they tried to get a short sale and gave up. They didn't make the tax credit."

The federal tax credit, which expired April 30, was expected to boost home sales in Las Vegas, though a preliminary report from Nevada Title Co. showed 2,645 escrow closings in April, down from 3,110 in March. However, median closing price rose to $143,900, an increase of $6,900 from March.

Statistics to be released by the Greater Las Vegas Association of Realtors on Monday are expected to show similar trends, an industry source said.

American West Vice President Leslie Bausher said Reserve at Coronado Ranch homes will serve a broad market segment. Prices run from $254,500 for the 2,492-square-foot plan to $273,000 for the five-bedroom, 3,019-square-foot home with an optional guest suite.

"This is the kind of home that a couple could live in comfortably or a family that needs five bedrooms," Bausher said. "And the value ... this house would have been $525,000 two years ago, and that's not with granite countertops. We couldn't do that before. Subcontractors are so cooperative and really working hard."

Bausher said homeowners will be more reluctant to let their homes go to foreclosure as the market improves.

"The fundamental reason people want to live here hasn't changed," she said. "Look at this beautiful day. Look at the schools we have, the parks we have. We're going to lead the economy back."

Lee said he could argue that the lower end of the housing market has reached the bottom because of all the investors.

By a show of hands, Lee surveyed Realtors to find they were getting multiple offers on homes up to $250,000. Beyond that price, the home has to be in an extraordinary area with amenities to attract multiple offers, he said.

"High-end prices are still coming down. There are 40 homes for sale in The Ridges. Why? The stock market is down, portfolios are down," Lee said. "Part of the problem is overbuilding and until that's absorbed, we won't get back to recovery."

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.