The new home luxury market is surging during the first six months of 2019 despite a decline in the housing market overall, and MacDonald Highlands and Summerlin continue to dominate the marketplace with a combined 80 new home closings of $1 million or more.
Home Builders Research reports there were 123 new homes closed from January through June, 41 percent higher than the 87 during the first six months of 2018. There were only 52 such sales in the first half of 2017.
The luxury threshold in Las Vegas is considered $750,000 and above, and when it’s included there were 313 closings during the first six months. There were 234 such closings a year ago. That’s 30 percent higher over the past year.
The luxury new home market has come a long way over the past three years.
In 2017, there were 145 new home luxury closings of $750,000 or more and there were 108 in 2016 during the same six-month period.
None of those numbers include people who bought custom lots and had homes built to their own specs in such communities as The Summit Club in Summerlin, Ascaya in Henderson, Lake Las Vegas, Southern Highlands and elsewhere. They don’t fall under home closings tracked by county records.
The upswing in luxury bucks the trend of single-family homes of all price points that combined was down more than 7 percent in closings during the first six months of 2019.
“It’s got to be a lot of the California effect,” said Home Builders Research President Andrew Smith. “People who are selling a home in California can buy a similar home in Las Vegas much cheaper, and there’s some great products out there on the market. What the production builders are doing is very impressive.”
Modern architecture continues to become a greater part of the freshening Las Vegas, displacing Mediterranean and Tuscan styles that aren’t as coveted, Smith said.
Summerlin had the most closings of new homes of $1 million and above in master-planned communities at 55. That was followed by 25 in MacDonald Highlands, eight in Southern Highlands and three in Lake Las Vegas, Home Builders Research said.
Other production homes that aren’t in master plans but with luxury closings of $1 million and above include 12 in Axis by Pardee in Henderson; five from Pinnacle Homes in the northwest; four by Richmond American at Stirling Manor in the southwest valley; three by Liberty Homes at Mountain Vista Estates; two by Pulte at Blackrock in Henderson; and two by Touchstone Living at Homestead, according to Home Builders Research.
Klif Andrews, division president of Pardee Homes, said the builder has benefited from the influx of luxury California buyers at Axis in Henderson, where the are homes $2 million and above, and in Nova Ridge in Summerlin, where there are homes priced more than $1 million.
“We’re seen more of the affluent California buyer than we ever have,” Andrews said. “It’s driven a lot by them looking for a better tax situation and real estate situation. It’s the (federal) tax change that happened last year where they no longer got the same deduction on their state taxes. That’s significant to an affluent buyer. If you’re paying 13 percent in state income tax in California and you’re making $500,000 a year, that’s a big number and a lot of them are choosing to relocate to Nevada.”
Andrews also said the buyers are drawn to a contemporary design.
“That’s almost a must have,” Andrews said. “They want some kind of a view, and they want great indoor-outdoor living.”
Andrews said there’s no indication the luxury sales trend will slow down unless the economy starts to sour. He said closings have picked up this year because interest rates have dropped from 5 percent last fall to less than 4 percent this year.
“Buyers are feeling much more confident today than six months ago,” Andrews said. “A lot of that is driven by lower rates. That is very supportive of new home sales. You can get a $1,000 a month savings from a one percentage point interest rate deduction on a $1.5 million house.”