New home prices fall, builders add incentives

Home shopper Steve Roberts has many options when it comes to buying a new home in Southern Nevada. It's described as a "buyers' market" with a disproportionate number of new and existing homes for sale outnumbering actual home sales.

He is taking his time -- considering not just the square footage, quality construction, home design and location, but also builder incentives and decreasing prices.

"I have been looking at new homes for just under a year. Because I travel a lot for work, it is kind of difficult because things are changing all the time in this housing market," said Roberts, president of S.C. Roberts and Associates, a local casino services consulting company. "I am looking for a home with outdoor space for my three dogs, preferably in the southern part of the valley. A home with an upgraded kitchen, one designed for entertaining. There are a lot of deals out there."

Roberts has enlisted the help of Vandana Bhalla, a Realtor with Liberty Realty, in his search.

"Many home builders are offering incentives and they range greatly. Some have offered monetary amounts toward closing costs and upgrades on select homes that range from $10,000 all the way up to $100,000 on high-end homes," Bhalla said.

Homeowner George Sakin also carefully considered these types of offers when he relocated to the valley in 2007. Incentives influenced his decision to purchase a standing inventory home at Pardee Homes' Fairbrook neighborhood in Henderson.

"I moved to Las Vegas from San Francisco so my perception of home values was jaded when you compare the cost of homes here to what you can get in San Francisco," Sakin said. "A lot of the homes that I saw were great homes. I wanted a 'wow factor,' but with a lot of the homes I'd have to go in and redo stuff.

"Then my Realtor took me over to look at this house in Fairbrook. It was standing inventory. Pardee included $60,000 in upgrades, and they had just reduced the price by $90,000," Sakin said.

"I closed on the home with bare floors and there was no landscaping in the backyard. The price was so reasonable that I could even put in my dream backyard and create that 'wow factor' and roll the cost into the mortgage. I got exactly what I wanted in the backyard and my home."

In order to receive these incentives, Sakin had to use the builder's preferred lender. His company through whom he relocated had a preferred lender, too. Upon comparison, Sakin decided that Pardee's offered a better rate, incentives not considered.

"When you look at a house you kind of have a wish list. Almost everything that I wanted was in this house and what wasn't in it was affordable," Sakin said. "Everything just really clicked in my home purchase."

Market conditions changing

In the future, home buyers may not have as many incentive options due to the changing Southern Nevada housing market, according to Monica Caruso, Southern Nevada Home Builders Association's director of public affairs.

"A lot of these incentives may be coming to an end," Caruso said. "Builders are not in the same situation as six or eight months ago. Their sales are up and there are reports that sales traffic is up. I do believe that we are now getting to the end of a cycle."

According to a Capital Markets/Housing Industry presentation made by City National Bank in May, Clark County has a projected population increase of 4 or 5 percent in each of the next five years, and these newcomers will need a place to live, which in turn will lead to home sales.

Additionally, as of March 31 new-home permits had decreased by 74 percent from the previous year and the inventory of single-family detached new homes were at 1,400 to 1,500 units -- meaning that local builders do not have a lot of standing inventory.

"Builders are not in the same situation as six or eight months ago. Their sales are up and there are reports that sales traffic is up. I do believe that we are now getting to the end of a cycle," Caruso said.

"There are two main factors for home buyers as to why it continues to be a great time to buy. The pricing has gone back down to the 2004 levels. The affordability is excellent. It is also a good time to buy because of the interest rates. It is good for home buyers who are qualified because they can have a house payment that they can afford," she said.

Offers run the gamut

Home shoppers can learn about incentives through advertisements, builder Web sites, neighborhood sales offices and Realtors.

"Anyone who is looking for a new home really needs to be a savvy shopper. A Realtor can help them find a home, lead them toward incentives and help them through the decision making process," Bhalla said. "If they do not have a Realtor, home shoppers should specifically ask home builders if they have any incentives available, especially on standing inventory homes. Buyers need to ask when they visit a sales office."

Builders offer incentives on the purchase of specific homes. Pardee Homes has developed an e-mail-based marketing promotion for unsold homes nearing completion.

"Pardee Homes is currently featuring Red Door Deals, a program which highlights select homes that are available or nearing completion," Rob Tuvell, regional sales director for Pardee Homes, said.

The promotion, which includes a move-in package and special financing, runs through June and details can be found at pardeehomes.com.

Signature Homes is offering incentives at its Bristlecone neighborhood in the southeastern valley.

"Incentives have always been part of the seller's contribution in a buyer's market. They can be both citywide and in specific communities," said Susan Proctor, vice president of sales and marketing for Signature Homes.

"At our Bristlecone neighborhood, we are in a presale environment and we are offering great incentives throughout the month of June. We are offering up to a 9 percent buyer incentive of the base of the (home's) sales price that can be used toward closing costs and down payment.

"We are also including a washer, dryer, refrigerator, granite countertops, blinds, and an upgraded flooring package outside of our standard features."

Proctor said that an example of a citywide offering is the availability of Federal Housing Administration and Veterans Affairs loan programs at all five Signature developments and the opportunity for complimentary, same-day mortgage prequalification. More information is available at signaturehomes.com.

A one-time incentive package proved successful in attracting home shoppers to the May opening of models at Meritage Homes' City Homes, Garden Homes, Village Homes and Estate Homes neighborhoods in Inspirada. For more information, visit meritagehomes.com.

"People who came in and purchased a home during our 'Get It All' event received an incentive package of stuff worth up to $20,000. We offered a range of things because not every buyer is the same," Robb Beville, division president of Meritage's Las Vegas division, said. Among the items offered were new furniture, appliances, window coverings, a home theater system, groceries and house cleaning services.

"It was very well received with over 300 people visiting during our grand opening and 11 reservations. It was a great way for us to start off sales of our new models," he said.

Lennar Homes has taken a different approach by focusing on pre-set mortgage rates for qualified buyers in its nationwide "Let's Get America Moving" campaign.

"We are not doing the discounts that other builders are doing. We are looking at incentives in a different light and what is really going to benefit the most home buyers," said Jeff Galindo, vice president of sales and marketing for Lennar's Las Vegas division. "Lennar has had a tremendous success with this campaign because it has primarily been focused on what consumers have been asking for. Primarily they have been asking for ways to make homeownership available to them in this market.

"... In essence, we have gone out and secured competitive mortgage rates with our preferred lender, UAMC (Universal American Mortgage Co.). Through our program, (qualified) buyers can purchase a home with a very little down payment."

The financing program offers a 2.88 percent fixed rate for the first year of a mortgage, 3.88 percent fixed for the second year, and 4.88 percent (5.34 percent annual percentage rate) fixed for life.

Since the program began over two months ago, Galindo said Lennar has had more than 100 sales and more than $22 million in sales volume at its 30 Southern Nevada neighborhoods. The program is anticipated to continue into June. Details are available at Lennar neighborhoods and at lennar.com.