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Las Vegas builders have best first quarter since 2021

Led by Lennar as the clear winner as the top homebuilder in the first quarter, the Las Vegas new-home market posted a strong first quarter despite elevated mortgage rates.

With more than 1,300 new-home net sales in March — sales minus cancellations — the market surpassed 1,300 for the first time since March 2021. This first quarter is the first time local builders have reported more than 1,000 net sales for three consecutive months since the first quarter of 2022 before mortgage rate increases, according to Las Vegas-based Home Builders Research.

During the first quarter, there were 29 percent more year-over-year net sales calculated by a 22 percent jump in sales and 16 percent decline in cancellations. The 3,422 net sales in the first quarter surpassed the 2,659 in the first quarter of 2023 and fell just below the 3,478 in the first quarter of 2022 when mortgage rates started their acceleration from just over 3 percent to start 2022 and surpassed 7 percent in October 2022.

In 2023, the rates hovered around 6.25 percent in April and peaked 7.63 percent in October 2023 before falling to just over 6.5 percent to start 2024 before increasing this year to approach 7.25 percent, nearly a percentage point higher over the past 12 months.

“New home sales continued to rise through the first quarter despite average 30-year mortgage rates rising over the course of those 13 weeks as well as less-than-encouraging news from the Federal Reserve about inflation and rate cuts for the remainder of 2024,” Home Builders Research President Andrew Smith said.

Historically, there were 4,113 net sales in the first quarter of 2021 as the new-home market boomed in the aftermath of the pandemic. There were 3,113 net sales in the first quarter of 2020 and 2,584 in the first quarter of 2019 before the pandemic.

Lennar was March’s top builder with 202 net sales and 586 for the first quarter. That’s 7 percent higher than the 547 in the first quarter of 2023. Lennar only had one community among the top 10 sellers in the quarter at Dalton in east Las Vegas with 47 net sales. Lennar had 12 net sales per community across their 48 active offerings during the period, Smith said.

Lennar has been active in the land market and gearing up for more. In March, Lennar acquired nearly 40 acres in the Inspirada master-planned community in west Henderson and over more than 180 acres in Lake Las Vegas on the eastern boundary of Henderson, Smith said.

Pulte Group was second with 502 net sales, a 39 percent increase from the 361 in the first quarter of 2023. It had the second-highest-selling community in the quarter with its Del Webb Lake Las Vegas, which is age-restricted, with 50 net sales. It had No. 5 with Sun City Mesquite with 48 net sales, No. 7 Paldona with 43 net sales and Cordora with 39. It also had No. 10 with Unmar Ranch with 36 net sales.

D.R. Horton was third with 485 net sales, a 24 percent increase from the 392 a year ago. Its Symmetry Trails with 50 net sales tied Pulte for the second-highest-selling community in the first quarter. It had No. 8 Amico Trials with 40 net sales and Spectrum Trials tied for No. 10 with 36.

KB Home was fourth with 370 net sales, a decline of 10 percent from the 411 a year ago. As a builder of entry-level homes, KB is considered one of the most vulnerable builders to higher interest rates.

Richmond American was fifth with 308 net sales, a 48 percent increase over the 208 a year ago.

Century Communities was sixth with 207 net sales, a 200 percent increase over 69 a year ago.

Toll Brothers was seventh with 190 net sales, a 96 percent increase over the 97 a year ago.

Tri Pointe Homes was eighth with 154 net sales, a 75 percent increase over the 88 a year ago.

Taylor Morrison was ninth with 151 net sales, a 66 percent increase from 91 a year ago.

Beazer Homes was 10th with 135 net sales, a 22 percent increase over the 111 a year ago.

Touchstone Living, which was sixth a year ago with 130 sales, fell just outside of the top 10 builder list. It was No. 1, however, in its Watercolor community with 59 net sales and No. 4 with its newly opened Independence in east Las Vegas with 49 net sales. Touchstone caters to the entry-level buyers. Smith said Watercolor, which opened in North Las Vegas in January 2021, has averaged 20 net sales per month.

One of the takeaways from the list of top-selling communities for the first quarter is a slight increase in the number of traditional single-family residential products represented, Smith added.

“As usual, the majority (63 percent in this case) of the top-performing projects were either attached product types or age-restricted, active-adult offerings,” Smith said.

In a sign builders are more optimistic about the market, some 80 percent more new communities opened in the first quarter of 2024 than the first quarter of 2023.

Smith said there were seven new product lines from six different builders opening for sale in March, bringing over 700 lots into the market. Two of these projects offered attached product types, Tribute Trails from D.R. Horton in Skye Hills in the northwest valley and Monument at Reverence in Summerlin from Pulte Homes.

Beazer Homes, Richmond American Homes, Summit Homes and Woodside Homes opened traditional single-family projects in Henderson, the northwest, southwest and Mesquite, Smith said.

While building permits fell 9 percent year-over-year in March, the 2024 total of 3,523 is 31 percent higher over the first quarter of 2023, Smith said.

New-home closings, a lagging indicator, fell 0.3 percent in March, but the first quarter total of 2,933 is 18 percent higher than the first quarter of 2023. There were 765 single-family detached closings in March, 9 percent less than a year ago while the 2024 total sits at 2,164, 10 percent higher than 2023 through the first quarter, Smith said.

There were 280 closures on attached products in March, a 36 percent increase over March 2023. The 2024 total of 769 is 49 percent higher than 2023 through March. The market share for attached new home products in March was up slightly at 27 percent, Smith said.

Buyers continued to focus on new homes in greater numbers with limited inventory on the existing home side.

The market share of new home closings in March jumped back up to 28 percent, a level similar to the third and fourth quarters of 2023 after starting this year around 22 percent, Smith said.

Home Builders Research reported the median new home closing price for all product types was $483,470 in March, a 4 percent increase from March 2023. The median new home closing price for single-family detached products was $514,645, up 5 percent from March 2023. It was $379,990 for attached products, a 6 percent increase.

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