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Luxury new home sales skyrocket since 2020

Demand for new luxury homes in the Las Vegas Valley remains strong and builders and developers expect a great 2024 coming off a Super Bowl that saw members of the Kansas City Chiefs rent out multi-million-dollar homes with displays on social media.

Las Vegas-based Home Builders Research reported there were 567 new-home closings of $1 million and above in 2023, up 4 percent from the 544 in 2022. That number, aided in part by higher construction costs, have continued to escalate since prior to the pandemic.

There were 247 new-home luxury sales in 2019 followed by 313 in 2020, and 432 in 2021. Luxury sales are up 81 percent since 2020 when the surge started in that segment after the shutdown from the pandemic caused people to reevaluate their living experiences.

The Home Builders Research numbers aren’t able to track luxury homes built by their owners who purchase a lot and hire a contractor. That development continues to be strong in luxury developments of MacDonald Highlands and Ascaya in Henderson, Southern Highlands and The Summit Club in Summerlin.

Clark County property records say the most expensive new home sold in 2023 that wasn’t a self-built custom home was to Switch CEO Rob Roy who bought a clubhouse suite in The Summit Club in Summerlin for $15.5 million. The developer of the resort community, Discovery Land Company, was the builder.

Roy previously paid $33 million for 5 acres to build a luxury estate in The Summit Club, which is home to actor Mark Wahlberg and Vegas Golden Knights owner Bill Foley.

Discovery Builders dominated the top sales among production homes with $13.5 million for another unit in its clubhouse and $12 million for a villa. Discovery had four other clubhouse sales in the $7.3 to $9.4 million range.

The highest sale of a production home outside of The Summit Club was a Blue Heron home sold in December on Chisel Crest Court in Ascaya for $13.9 million.

Toll Brothers led the way in luxury production building in 2023 by selling 124 homes of $1 million and higher, most of them in Summerlin. They were followed by Lennar with 107; Tri Pointe Homes, 85; Pulte Group, 57; Richmond American Homes, 38; Pinnacle Homes, 27; Christopher Homes, 30; Discovery Builders, 19; Blue Heron, 17; Shea Homes, 9; Liberty Homes, 8 and Landon Miller Homes, 5.

Among major production builders, Century Communities sold four. Taylor Morrison sold three; and Woodside Homes sold two.Several smaller builders sold three or fewer homes.

Kansas City Chiefs draw attention to luxury

Three star players of the Super Bowl-winning Kansas City Chiefs were among those who rented out luxury homes during their stay in Las Vegas during that week.

Real Estate Millions highlighted a MacDonald Highlands home that was rented in February for $100,000. Chiefs tight end Travis Kelce, the boyfriend of Taylor Swift, rented the MacDonald Highlands home and videos were posted on Instagram showing him at the property.

In addition, Chiefs quarterback Patrick Mahomes rented a home in Southern Highlands while defensive lineman Chris Jones rented a home in Roma Hills in Henderson, according to the Las Vegas real estate community.

“I think it’s great for the city,” said Tyler Jones, CEO and founder of luxury builder Blue Heron. “The Super Bowl, FI and all of these massive mega events with superstars and celebrities and people staying in these ultra-luxury homes are great for our real estate market. As people come to Las Vegas with this different level of wealth, buying a home for $10, $20 or $30 million is becoming more normalized. People in that price point can pay $50,000 to $100,000 for short-term rentals. It speaks to the overall affluence in the luxury real estate market. These rentals elevate the whole prestige of LasVegas and the real estate we have here.”

Alese Morrow, a Realtor and vice president of sales at Terra Firma Development, which will be building a $75 million home in MacDonald Highlands, said events like the Super Bowl that bring athletes and celebrities to town who rent luxury homes show them and others that Las Vegas is more than just the Strip and a great place to live.

“We are The Entertainment Capital of the World with hockey, football and the Super Bowl and so many events that are driving traffic to Vegas and seeing how special it is,” Morrow said.

New luxury community

Ascaya, the Henderson hillside development, held a groundbreaking ceremony Tuesday to unveil The Canyon at Ascaya. The Blue Heron project is a collection of luxury condominiums that look and feel like homes ranging from 3,391 square feet to 4,407 square feet with either three or four bedrooms.

Sam Brown, development lead for Ascaya, said they spent the last two years working on what he calls a “project within a project,” in a canyon in the mid-level of the hillside development that otherwise focuses on high-end custom homes. The project comprises about 80 acres of the 670 acres in Ascaya.

Ascaya took 21 lots to create a condominium community that is a “lock-and-leave” resort-style community. Every structure looks like a custom home, Brown said.

Eleven of the condominiums stand by themselves as if they were single-family homes while 40 others are two levels with one home stacked upon another with a staircase and elevator leading to the second-floor home, Brown said.

“It’s semi-private living,” Brown said. “In a condominium, you expect a tower where everyone shares a garage and a lobby and takes an elevator to your floor and your unit.

This lives like a house. You pull into your garage and walk into your house. We think we’ve created something that doesn’t exist. Vegas outside of the Strip is really a single-family market, but we see a lot of people looking for something that’s turnkey and lock-and-leave where they travel for large parts of the year and leave their home.”

The prices start in the high $2-million-dollar range and go up to $5 million with the homes that stand alone, Brown said.

Construction is expected to start within the next month with the first units completed in the second quarter of 2025. The project is 100 percent designed and will be built on spec, Brown said.

“They are coming with a high-level custom specification,” Brown said. “I have built custom homes that are not as nice as these.”

Reservations are already being taken. There’s interest from existing Ascaya owners wanting something simpler. It’s Las Vegas residents and it’s those looking to build a home in Ascaya but want to live in something until their home is completed. Potential buyers are those who don’t want to go through the process of building a custom home, Brown said.

“There’s a gap in the market in the $3 million to $5 million range, and it’s hard to find a home that is in a great community that has amenities like Ascaya and is also new,” Brown said. “You can live in a great community for $3 to $5 million in a home that might need some work and not be new or be in a community that has less amenities and is less secure. There isn’t something done like (we’re doing) that has these benefits and is also architectural.”

Overall in the development, Ascaya has sold 150 lots with 45 homes completed and a similar number under construction, Brown said. Ascaya has 310 lots, which means the project is about half sold out.

Brown said the Las Vegas luxury marketplace is in a good place. The Ascaya sales center is busy and recently accepted an offer on a spec home it built and other builders who’ve built spec homes in Ascaya have accepted offers.

“Three homes of significant value have gone under contract since the beginning of the year at least,” Brown said. “We’re continuing to sell our home sites at great value. We have a great outlook on this year, and I know other companies in the industry are saying similar things.

They are saying January was an awesome month and February is, too. Looking back over the last five years, the market is the best in the second and third quarters of the year and to see the activity in the first quarter then this is going to be a great year.”

Brown said buyer sentiment is high with a strong economy and bulging stock market, and that they expect mortgage rates to continue to go down. It’s a growing city with restaurants, sports and other amenities and when people are looking for a new place to live, Las Vegas is a bigger part of the conversation, he added.

“It’s super exciting to see the numbers at our friends’ (communities) — whether it’s MacDonald Highlands or Summit Club,” Brown said. “I love to see the success they are having. When they are having a lot of deal flow, we are, too. It’s great to see the luxury market picking up in a positive way.”

Jones said January and February was a great start to the year with sales, traffic and buyer interest and that bodes well for 2024. Blue Heron is building luxury homes in Lake Las Vegas, Ascaya, MacDonald Highlands and other high-end developments. Both its luxury production and custom home divisions are doing well with eight spec homes under construction priced between $6 million to $15 million and others ready to go, Jones added.

“We’re very optimistic about the market right now,” Jones said. “We have all kinds of interest right now even in that $10-milion plus category that historically has been pretty rare. It seems it’s a lot more common to have conversations about that.”

Problems wealthy clients are facing in other states from California to Washington are prompting people to relocate to Las Vegas, Jones said. Washington state has enacted a capital gains tax and Seattle was looking at doing the same.

“It’s a continuation of this California exodus and other states as well,” Jones said. “We see a lot of Chicago and Washington state and Portland. It’s continuing to increase for people coming to Las Vegas for similar reasons.”

Morrow said Terra Firma broke ground two weeks ago on its first project in MacDonald Highlands, an $18 million, 11,700-square-foot, two-story home with five bedrooms and five baths. The buyer is from San Diego relocating to Las Vegas for tax purposes, she said. The home is expected to be completed in April 2025.

Terra Firma has 35 home sites in MacDonald Highlands. The $75 million home that measures 55,000 square feet remains in the design phase and is expected to start construction later this year, Morrow said. It will take 2½ years to build. Terra Firma has five other home projects starting in 2024 at prices that range from $15 million to $25 million.

“There’s a lot of people moving out of California that see the value here,” Morrow said. “A big portion of our business in the last year is from out-of-state buyers.”

Gene Northup, a Realtor with Las Vegas Sotheby’s International Realty, said there’s not enough existing homes in the $2 million to $6 million that’s prompting people to look at new construction. Northup is the master listing agent for Lake Las Vegas’ sale of custom lots.

“It’s driving the market for new luxury homes,” Northup said. “They are waiting a year because they have to build it and in the interim they’re renting. That’s the other problem we’re facing. We don’t have enough luxury rentals. They are fighting for the inventory. When something comes up, it’s on the market for a short time because someone grabs it.”

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