Growth shooting LV home sales to record

Phil Levine

Wednesday, Dec. 1, 1999 | 10:51 a.m.

Las Vegas new home sales are on track for another record-breaking year, despite a third quarter slowdown in activity.

A survey by the Irvine, Calif.-based consulting firm the Meyers Group found 4,815 new homes were sold in Las Vegas between mid-August and mid-November. That represents a 5 percent decline from one year earlier, and a 16.7 percent reduction from the previous quarter.

Still, Meyers Group Vice President David Thikoll said an unwavering demand for new homes helped sustain the annual sales momentum.

"The strong demand for new homes (in Las Vegas) continues, especially in the move-up sector of the market," said Thikoll. "People continue to move to Las Vegas, and that means there's no letup in demand. However, interest rate hikes have affected the entry-level sector, and that's why new home sales are off."

Thikoll said a large proportion of new homes sold in Las Vegas are entry-level, making the local market much more susceptible to interest rate variations.

The third quarter survey found median detached new home prices in Las Vegas were up 5.5 percent over the same period last year, and 2 percent higher than the previous quarter. During the last quarter, the median new home price in Las Vegas stood at $146,590 compared to $138,990 one year earlier.

Dennis Smith, a director of the Southern Nevada Home Builders Association, said his organization is also predicting a record year for new home sales in Metropolitan Las Vegas.

"The sales of new homes totalled 20,259 last year, and we're expecting the final (sales) number to be between 20,500 and 21,000 this year," Smith said. "Our year-to-date sales are up 6 percent over last year, although new home permits are down an equal amount."

Doug E. Swallow, president of Las Vegas-based market research firm DES & Associates, agreed the demand for new homes remains strong. However, he said a decline in the number of new Las Vegas projects -- and builders -- is putting the brakes on new home sales.

"The core number of builders in Las Vegas has declined over the last couple of years from 166 to 96," said Swallow. "In addition, recent hikes in interest rates have negatively affected demand for new entry-level homes."

Still, Swallow said overall demand for new Las Vegas homes was up a strong 10 percent this year.

"That demand is strong throughout the Valley, everywhere from Henderson across to the northwest sector," he said.

Adds Thikoll of the Meyers Group: "The signs (in Las Vegas) are still mostly positive. Despite rising interest rates and a decline in quarterly sales, we are still guardedly optimistic about Las Vegas' prospects for next year."