‘California Impact’ driving up Las Vegas home values

Kevin Ferguson

Friday, July 20, 2001 | 10:56 a.m.

An influx of Californians moving to Southern Nevada to escape a Golden State recession, an energy crisis and a higher cost of living is driving up the values of homes in the Las Vegas Valley, a local real estate expert said.

"People are moving here from other markets where they are used to paying a lot more for homes," said Steve Bottfeld, executive vice president of the consumer research firm Marketing Solutions.

The median resale home price in one Southern California market, Orange County, is about $300,000, said Hunter Robbins, public relations manager for the research firm The Meyers Group, Irvine, Calif.

In comparison, the Las Vegas resale home price is $138,000, said Dennis Smith, president of Las Vegas-based Home Builders Research Inc.

In 2000, new residents to the Las Vegas Valley totalled 96,000, of which 38 percent came from California, Bottfeld said. He expects that figure to be higher this year because of a flood of people frustrated with the energy crisis.

"We've had one blackout in Las Vegas, while California's had 21 rolling blackouts in the past few months," Bottfeld said.

The Nevada Development Authority has cited businesses having the same concerns about reliable power supplies when considering relocations to Southern Nevada. And, when the businesses arrive, the affordability of homes for employees becomes a key selling point.

In Southern Nevada, the highest selling category of homes have been the "first move-up" homes, which range from $120,000 to $170,000. Four years ago, the "affordable" homes -- $120,000 and below -- was the hot market, according to data gathered by Marketing Solutions.

"We're moving toward the 'second move-up' ($170,000 and higher) becoming the most popular area of home sales," said Bottfeld.

The median price of Las Vegas Valley resale homes have risen 9.7 percent in the past two years. In May, the median price of resale homes was $138,000, while that figure was $125,750 in 1999, Smith said.

Smith predicts resale home sales to outpace new homes by 45 percent in 2001. About 32,000 resale homes should be sold this year compared with 22,000 new home sales, he said.

That's a contrast from five years ago. In 1996, 19,785 new homes were sold in the Las Vegas area compared with 18,253 resales, Smith said.

Smith and Bottfeld released their data to a breakfast networking crowd Thursday at the Tropicana hotel-casino.

Bottfeld said six home builders in Las Vegas have set goals of selling 1,000 homes in 2001.

Those are ambitious goals considering only two reached that mark in 2000. KB Home sold 3,010 and Del Webb sold 1,889.

Bloomfield Hills, Mich.-based Pulte Homes, which is attempting to complete a $1.8 billion acquisition of Phoenix-based Del Webb, sold 855 homes in 2000.

Bottfeld said Pulte-Del Webb and KB Home each have set goals of selling 3,000 homes this year. Pardee and American West also are shooting for more than 1,000 home sales this year. Bottfeld declined to release the other two home builders.

The growing influence of Generation Y'ers -- people born in the 1980s and 1990s -- will push median home sales to new highs, because they tend to move back home after college to save money for their first home, Bottfeld said.

"Baby boomers delayed childbearing and now Gen Y'ers are delaying entering the real world," Bottfeld said. "But it's not because they're lazy ... they don't want to struggle like the Gen X'ers, who couldn't wait to get out on their own and settled for a one-bedroom apartment."

archive