July 24, 2020 - 5:20 pm
Summerlin still leads the pack.
Summerlin, the west valley’s master plan, is celebrating its 30th anniversary this year. Despite the COVID-19 crisis, it has retained its No. 4 spot in a recent national report that ranked master-planned communities for the midyear. It had 642 sales, down from 675 in 2019, a decline of 5 percent.
Kevin Orrock, president of the Las Vegas region for the The Howard Hughes Corp., the developer of Summerlin, called the master plan’s ranking and steady sales a “remarkable achievement” given the area’s significant business and economic loss that shut down the Las Vegas Strip — the region’s primary economic driver — for weeks.
“The fact we ended up fourth in the country in terms of home sales is somewhat amazing,” Orrock said. “No other city had a major shutdown for 60 to 90 days. If you went back to March when the pandemic hit and stay-at-home edict March 18 by (Gov. Steve Sisolak), I wouldn’t think we’d be where we are today. Our sales in June (157) were higher than January and February. When you reflect back on that with the pandemic and market dropping like a rock, those are all negatives. But there were some pluses.
The Fed came in with a stimulus and drove interest rates down and mortgages became very attractive; and then the state opened Phase One and Two and all of sudden home sales came back very strong.”
Summerlin saw its strongest new-home sales in 2019 since the Great Recession and sales were strong in January and February before the pandemic hit, Orrock said. There are still some challenges with the economy and tourism, but he said Las Vegas is resilient and the resort industry is innovative. He said he’s not expecting Sisolak to shut down the economy again.
“We are 33 homes off of last year inside of a pandemic, and my guess we will finish this year with our builders doing as well or better than last year,” Orrock said. “The market is still strong and interest rates are extremely attractive.”
Orrock said with people spending so much time in their home during the pandemic they looked at them more critically and wished they had a bigger office, yard or open space. And with higher prices in the existing home market in Las Vegas and that inventory dwindling, that will push people to look at new homes, he said.
“I also think we will see somewhat of a migration to Southern Nevada as a result from folks leaving some of the urban areas like New York, Chicago and California that have a dense population,” Orrock said. “That may be one of the byproducts and benefits that Southern Nevada will see going forward. With a virus like this, Vegas plays into a different environment with the sunshine and being spread out.”
Orrock said one of the beneficiaries already is Summerlin West, the area of the community west of the 215 Beltway and north of Far Hills Avenue. It will be home to the community’s most diverse offering of homes to date, including a greater inventory of more affordably priced homes with smaller footprints to meet growing consumer demand, Orrock said.
Summerlin’s median price is just under $600,000, according to Home Builders Research. Redpoint Square has launched its first neighborhood called Moro Rock by Richmond American Homes with town home models starting in the high $200,000s.
Cadence in East Henderson remained No. 14 with 356 sales during the first six months, up 11 percent from 321 a year ago. Cadence had 193 sales in the first quarter, according to Home Builders Research.
Inspirada was ranked No. 25, down from the 12th spot in mid-2019. The West Henderson community was the one exception of a big downturn with 280 sales in 2020, down 19 percent from 344 in the first six months of 2019. No community was harder hit by COVID-19 than Inspirada whose net sales were up 22 percent in the first quarter when there were 210, according to Home Builders Research.
Skye Canyon in northwest Las Vegas ranked 27th, down from its 23rd ranking at the midpoint of 2019. But it had 275 sales, 15 more than 2019 — a gain of 6 percent. SkyeCanyon had 192 sales during the first quarter as the coronavirus hit.
Las Vegas, meanwhile, added a fifth master-planned community to the national rankings during the first six months of 2020 as North Las Vegas returns to become a bigger player in the valley’s housing market.
Southern Nevada’s master plan sales overall held steady with slight increases or declines despite a hit during the second quarter. Overall, Las Vegas ended the first six months of 2020 with 5,024 net sales — sales minus cancellations. That is down 4.6 percent from 5,265 a year ago, according to Home BuildersResearch.
Valley Vista, a project of DR Horton that opened in 2018, made its first appearance in the rankings put out by national research and consulting firm RCLCO. It came in sixth in the nation with 472 sales between January and June. A year ago at this time, Valley Vista had 110 net sales, according to Home Builders Research. Valley Vista is part of the resurgence in building in North Las Vegas that saw it account for 26 percent of the new home sales in the first six months of 2020.
The northwest and southwest valley had 21 percent each and Henderson accounted for 20 percent, Home Builders Research reported. During the second quarter alone, North Las Vegas accounted for 31.6 percent of sales, Home Builders Research reported.
“The southwest consistently accounted for 40 percent or more of the valley’s sales for many years and as recently as 2018,” Home Builders Research President Andrew Smith said. “The build-outs of major master plans like Rhodes Ranch and Mountain’s Edge and Summerlin pushing to the limits of the western foothills are the main factors contributing to the decline.”
The Villages at Tule Springs in North Las Vegas didn’t qualify for the national rankings even though it had 276 sales, some 37 more or 15.5 percent higher than 2019 based on Home Builders Research numbers. RCLCO said it falls under a subdivision rather than a master plan that takes into account employment centers and neighborhood shopping.
Lake Las Vegas had 106 sales in 2020, two more than the same period in 2019. It had 76 sales during the first quarter.
Sedona Ranch in North Las Vegas had 74 sales, down from 111 a year ago.
Southern Highlands had 71 sales, down from 92 in 2019.
Mountains Edge had 68 sales, down from 80 a year ago.
Valley Vista is a project of D.R. Horton and opened in September 2018 with plans for 4,000 homes. Karl Pischke, RCLCO’s vice president, said that delivery of more affordably priced homes helped bolt it to No. 6 in the nation.
“They are tapping into some significant demand despite the ongoing coronavirus concerns,” Pischke said. “They have kept pace throughout the year.”
Home Builders Research reported 246 sales in the first quarter and 226 in the second quarter. It said the asking price for homes in the community is $353,171.
“We are very proud of all the hard work of the entire D.R. Horton Las Vegas team, which has resulted in the success we are experiencing at Valley Vista,” according to a statement from the builder.
D.R. Horton said from attached homes to large estate homes with multigenerational living, Valley Vista offers a broad range of home types that appeals to various lifestyles. Its homes start in the low $200,000s, and there are nine active new-home communities in Valley Vista with plans for two grand openings in August. The 39 floor plans range from 1,124 square feet to 4,425 square feet.
Cheryl Gowan, Cadence’s vice president of marketing, said 2020 started out strong and when the economy shut down there was a slowdown, but Cadence is fortunate to surpass last year’s total through mid-year.
In May, Cadence announced a buyer-incentive program offering a $3,500 credit toward the purchase of a home.
“Since April-May, things have really started picking up, and it’s been very steady for us,” Gowan said. “We continue to see strong sales, the models are seeing folks coming in and appointments being made and at this point we think that will continue.”
Gowan also credits a low monthly homeowners association fee of $40 a month and a variety of products for the strong sales from first-time homebuyers in the mid-$200,000s. People learned from the pandemic they need more kitchen space or a home office, she said.
“We hope to see strong sales, and there’s a lot of value in Cadence,” Gowan said. “Water Street in Henderson continues to see revival. Water Street will go through Cadence to downtown Henderson (with construction underway). It will be an easy drive or bike ride to go to the new arena and take part in what is going on in downtown.”
Cadence has added a sixth builder in Harmony Homes, which will build town homes and begin selling in September.
Richmond American introduced its seventh neighborhood with homes starting in the upper $300,000s. StoryBook Homes added its second neighborhood called Rhapsody.
Brian Kunec, president and regional general manager of KB Home’s Las Vegas and Seattle divisions and lead builder in the west Henderson master plan, said not to look at the overall sales numbers for the first half of 2020 to get a true picture since sales were strong during the first quarter and are just now returning.
KB took an aggressive approach to buyers by allowing them to cancel contracts and get their money back with all of the job losses and economic shutdown because of the pandemic.
“During the last five weeks after we have gotten through hopefully the COVID phase, we have had very strong sales in Inspirada,” Kunec said. “We’re back on pace where we were pre-COVID. Things are very strong and not unexpected. We’re very bullish on Inspirada.”
Before the shutdown, Inspirada benefited from the ongoing development and job creation in West Henderson, including the Las Vegas Raiders headquarters that has since opened. The Valley Health System plans to build a 40-acre campus near the Raiders’ practice facility. Plans call for a 550,00-square-foot hospital and 250,000 square feet of medical office space. That will create more housing demand within Inspirada.
“I think it’s 100 percent true that west Henderson is an up-and-coming area to me and is one of the top two or three desirable places to live in the valley,” Kunec said. “Two to three years ago we got the comment about Inspirada that it feels so far out and not close to anything. The reason is a lot of West Henderson wasn’t developed yet with the amenities. Now, with the amenities, not only does Inspirada feel a lot closer, but there’s a lot happening there.”
KB is targeting the entry-level price point at Inspirada with the lowest in the $240,000s for town homes and beyond $400,00s with single-family homes.
In terms of total sales volume, the Las Vegas metropolitan area came in at second place in the nation with 2,028 sales, behind Houston.
What happened in Las Vegas with the top master-planned communities of holding their own was a trend seen across the country, according to RCLCO Managing Director Gregg Logan. The 50 top-selling master-planned communities in the country sold almost 7 percent more homes than the communities that made up last year’s Top 50 list, said Logan, who cited a flight to quality and safety during a crisis.
The Villages retiree-focused community in Florida once again claim the top spot in RCLCO’s ranking, along with two other Florida communities that round out the top three ahead of Summerlin.
Las Vegas was like the rest of the nation whose new-home sales were running way ahead of the 2019 pace until COVID-19 hit and spiked unemployment, raised the fears of consumers who were facing stay-at-home orders. Master plans, however, reported that sales started to recover during the second half of April that continued into May.
Las Vegas has positioned itself going forward as long as casinos, which reopened June 4, remain open along with the economy even though coronavirus cases are increasing.
Nevada reported an increase of nearly 100,000 jobs in June and a declining unemployment rate from 25 percent to 15 percent as the resort corridor opened. Builders and developers say reopening will only lead to more people buying homes as the jobless rate declines.
“I think we are pleasantly surprised the planned community has done as well as it has,” Logan said. “The lesson learned this wasn’t a (housing-led) recession and people still need housing. By late April or early May people were tired of sitting on the fence, and those who wanted a new house because they wanted more space and or to get out of something with higher density were chomping at the bit to get into something else.”