The new-home luxury market, led by demand for uber high-end estates, continues its strong run in Las Vegas and shows no signs of slowing in 2022 despite rising prices and mortgage rates that could be felt by the industry as a whole.
The latest numbers from Home Builders Research show Southern Nevada builders closed on 101 homes priced at $1 million and above during the first quarter. That surpasses the 91 in 2021 and 57 during the first three months of 2020 when the COVID-19 pandemic impacted the industry.
That 11 percent increase in luxury closings during the first quarter surpasses the new-home market overall that declined 2 percent in closings from the January through March period of 2021, according to Home Builders Research.
In the category of $750,000 and above, builders recorded 281 closings, a 45 percent increase over the 194 closings in 2021. There were 140 during the first three months of 2020.
Some of those jumps in percentages can be attributed to rising prices because of the cost of materials, labor and land, according to Home Builders Research President Andrew Smith. The median price of single-family homes closed in March was $483,000, a year-over-year increase of 17.8 percent.
“One, it’s a factor of prices going up in general,” Smith said. “But like we’ve seen on the resale side, the high-high end is doing very well, I think the white-collar workers that are coming from out of state with more income are able to afford something that’s high end in Las Vegas. What’s high-end in Las Vegas isn’t necessarily in California, and that’s part of it as well.”
In the ultra-luxury segment, Dan Coletti, president of Sun West Custom Homes, said they finished a one-story home during the first quarter in Ascaya in Henderson worth about $15 million. The home located on Heavens Edge Court sits on 2.5 acres, measures 9,600 square feet and has five bedrooms, eight bathrooms with a six-car garage and a cabana by the swimming pool.
“This was the third home we built for the same customer,” Coletti said. “This is the second in Ascaya while the first was in Seven Hills. It’s cool to have a repeat customer. He likes that it’s higher up in the hillside in the mountains of Ascaya, a beautiful view at the end of a cul-de-sac, and a bigger property. It’s an updated version from his last one we sold for $14.6 million last June.”
Real Estate Millions profiled the home and owner Stan Gribble.
Coletti said they listed the home on Heavens Edge Court for $15 million, but Gribble has decided to keep it for now and sell it later. He’s already bought another lot even higher in Ascaya, and when that one gets closer to being finished, he will sell the Heavens Edge home, he said. Construction will start in the summer.
“It’s another one-story home because we’ve put two lots together, and it will be about 15,000 square feet,” Coletti said. “It will be closer to $20 million.”
Coletti said the uber-luxury market continues to rise with people coming from California and other states. The state’s economic climate for building businesses and tax climate has helped with that, he added.
“These beautiful home sites in Ascaya and other communities like it offer up beautiful views of our valley, and people are eating it up,” Coletti said. “I have three under construction in MacDonald Highlands right now (including one of three stories and a casita measuring 24,000 square feet with two garages for nine vehicles on separate levels that will be valued at more than $25 million). I am working on some in Summit Club as well. We’re getting more than our fair share of uber-home buyers compared to other cities. That higher-end luxury market of over $15 million is stronger than I’ve seen in a lot of years.”
Coletti said for luxury buyers flexible spaces are growing in importance. If they have extra guests, they want a game room to convert to bedroom use.
“Some are also asking for larger garages that can accommodate more cars and more cool things,” Coletti said. “They are asking for the best of luxury we can offer. That’s top-of-the-line technology, which is home automation with automatic sliding doors and air conditioning systems that are controlled for energy efficiency.
“It’s not all about the finishes. It’s really about the core products — the windows, doors and all of the visual items. They want nice stonework and super-nice cabinets and granite and marble materials. It’s not about size as much as it is about overall quality and features.”
Luxury custom builder Blue Heron holds the all-time record for a $25 million sale in MacDonald Highlands in 2021, and CEO and founder Tyler Jones said the segment remains “extremely strong.”
The builder already has a dozen reservations for a project called Shoreline at Lake Las Vegas that starts around $1 million, Jones said. It offers waterfront and golf course lots.
During the last few months, the company has launched three other communities, including one in Lake Las Vegas called Strata and another near Pecos and Sunset roads in Henderson that will be between $2 million and $3 million.
“There’s a lot of interest in our communities that go for $3, $4, and $5 million,” Jones said. “On the elite side, that $3 million to $25 million has been our biggest year for those sales so far. California residents continue to be the main source of the buyers.”
Jones said they’re watching interest rates rising but it hasn’t impacted sales. California taxes impact that even more, he said.
“If you look at California and the impact that has on someone’s pocketbook and add a couple of points to their mortgage in the luxury segment, that California tax relief is a far bigger influence than incremental increase in mortgage rates,” Jones said. “It hasn’t been a big factor for us, and I don’t expect it will become one unless things change dramatically.”
Among production builders, Luke O’Loughlin, director of sales at Richmond American Homes, said the demand is strong but the company hasn’t had many luxury homes available for sales until April. It opened Veneto in the northwest valley, which sells for the upper $800,000s and $900,000s, and Richmond sold six homes within three weeks of the 20 lots available.
A second project called Estrella Park near Ann Road and Hualapai Way in the northwest valley has seen eight sales so far out of 40 lots. Those one-story ranch homes sit on half-acre lots and will go for more than $1 million and range from 3,300 square feet to 4,000 square feet.
“We’re always looking to fill in this product line,” O’Loughlin said. “There’s low inventory in general and on top of that with the luxury it’s even less. It’s a captured audience that doesn’t have a whole lot of options right now.
“We have something in the southwest called Galway Grove (with 21 half-acre lots) that’s been pushed back a few months, and we still have people calling us about the product line. We already have a waitlist for it. We’re excited to be in the luxury market again and excited for future projects.”
At Tri Pointe Homes, division president Klif Andrews said the luxury segment remains “very hot” and is expected to stay that way.
“Even with interest rate concerns and some potential slowing in other parts of the market, the luxury part isn’t slowing,” Andrews said. “They have a lot of cash buyers. It’s also being bolstered by out-of-state buyers who have a different viewpoint on our prices than we do because they have equity. To them, $1.5 million feels inexpensive even if you have higher mortgage rates.”
Tri Pointe has three projects in Summerlin that fall into the luxury category, Andrews said. They are Sandalwood, Overlook and Kings Canyon — all which average above $1 million.
“They want a large lot and gated community and location is paramount and premium lots are really important,” Andrews said.
Sandalwood, which opened in 2020 with average prices above $1.5 million, has one lot left of 112.
Overlook and Kings Canyon opened in late 2021, and every time a phase is released, it quickly sells out, Andrews said. Overlook averages $1.4 million, and Kings Canyon averages about $1 million.
“We have another year to go at Overlook and Kings Canyon, but it’s selling at a brisk pace,” Andrews said. “We’re starting to close our first homes right now.”
Andrews said Tri Pointe has a “substantial luxury project” coming for Lake Las Vegas that will be along the waterfront with 43 estate lots. It will be available in early 2023.
“Other parts of the market are hard to tell, but luxury doesn’t feel like it’s running out of gas at all,” Andrews said. “There are a lot of affluent buyers out there that are willing to spend money for things they love.”