This year the Southern Nevada Home Builders Association’s new president will face challenging times. Frank Wyatt of Pinnacle Homes takes the post as the industry logs two years of declining home sales and prices.
Still, he is optimistic about the future.
"This could be the year we finally see upward change," he said. "It may not be great change, but we’ll take all the positives we can get."
Wyatt, whose small homebuilding company has sold about 2,000 homes in the past two decades, said Las Vegas homebuilders have taken this downtime to tweak their designs and make their homes more energy efficient — using upgraded air-conditioning systems, windows and installation products.
"Building a home is much more of a science now than it has been in the past," he said. "The sum total of the home, as compared to the home of 25 years ago, is hands down better from an energy standpoint."
Local building codes this year will demand builders create houses that are 15 percent more energy efficient than those built in the past. Wyatt said he believes these new energy-smart homes will have more value to homebuyers who face increasing power bills.
Another bright hue in the big picture is the fact that Las Vegas housing is, for the first time in a long time, affordable. For those with a steady job, excellent credit and a healthy down payment, it’s never been a better time to purchase a home, experts say. Prices are down 60 percent from two years ago. The medium price of a new home is about $200,850, according to Las Vegas-based Home Builders Research, which tracks local home building activity.
There are some good deals out there. For example, many of Pinnacle Homes’ small tract houses in its Maplewood Springs neighborhood in the southwestern portion of the valley are priced at less than $170,000.
Wyatt said companies have found ways to reinvent themselves in these tough times.
"We’ve taken a smaller approach to our business," said the businessman who employs a staff of five. "We are getting back to the grassroots of what we know how to do in a smaller way. Revaluation is healthy for all business, and it’s happening in all sectors."
In these slim economic times, builders can ill afford additional costs that cannot be passed on to buyers, who have plenty of choices in a competitive housing market that include bank-owned properties.
The developer said one of SNHBA’s main objectives this year is to "minimize the impact of new regulation to our industry that will add substantial cost to the price of the home."
Dennis Smith, owner of Las Vegas-based Home Builders Research, said Wyatt’s background as a civil engineer will be helpful in representing homebuilders’ interest in the upcoming state legislative session and with municipal planning departments.
"He will look at what is good for the community as a whole, as opposed to what’s best for a specific group," Smith said.
Smith praised Wyatt for his "calm demeanor" and said the seasoned builder wasn’t apt to "blow smoke" at people by telling them the market is something that it isn’t.
"Everybody knows it isn’t good," Smith said. "He is realistic about the market."
"I think everybody knows it’s been tough," Wyatt said. "Anybody who owns a home knows they need that home to go up in value."
Many industry experts have said this year is the bottom for the housing market.
"I personally feel we are at the bottom," Wyatt said. "We are bouncing along the bottom."
Smith was a bit more candid on the subject.
"If this isn’t the bottom, I don’t want to see the bottom."
Indeed, Las Vegas got a big reality check in 2010. Home Builders Research estimates new home sales, including condos and high-rises, will come in at around 5,200. That’s about the same as 2009’s 5,275 total, which was supported by the $8,000 federal tax credit for new homebuyers and the $6,000 credit for move-up buyers, which expired in April.
Smith said if the industry can sell around 5,200 home this year it will be ahead of the game and on its feet toward recovery.
"If we close (2011) with the same number it will be a positive sign, taking into account the federal tax credit earlier this year that spurred some purchases."
In the city’s giddy growth years the homebuilding industry recorded fat sales of 38,957 in 2005 and 36,156 in 2006. That fell sharply to 10,504 in 2008 and plummeted to 5,275 the next year.
According to Smith, when the "crazy years" are omitted, the sales numbers of 20,000 to 22,250 logged in the mid-1990s are more "normal."
"Take the big boom and the big bust in the last four to five years out of the equation," he said. "It’s an anomaly."
In fact, Wyatt said the health of the home-building industry rests on the price of the home as opposed the total number of sales.
"Price is more important than the number of homes for new and existing (sales)," he said. "It’s all about home appreciation."
Wyatt, who grew up in Reno and was graduated from Earl Wooster High School in 1971, brings more than 35 years of experience in the Las Vegas building industry to the SNHBA, which has about 300 members.
After spending two years in the U.S. Air Force Academy, he earned a civil engineering degree from Georgia Tech in 1976.
He has worked as a civil engineer for SEA Engineers, know known as Stantec, and the Carlson Group in Atlanta.
He entered the multi-housing market in Las Vegas in 1985. For several years he worked in southeast Florida for a large Las Vegas-based apartment builder, before moving back to form Pinnacle Homes and Pinnacle Nevada Corp., which handles land acquisition, in 1992.