Las Vegas new-home sales rise in July

Jennifer Robison

Thursday, Sept. 5, 2002 | 11:22 a.m.

New-home sales in the Las Vegas Valley rose dramatically in July when compared to data from the same month a year ago, according to statistics from the real estate research firm of SalesTraq.

Valley home builders closed on 1,737 new homes in July, a 9 percent increase from the same month a year ago.

Despite that monthly increase, new-home sales remain just under 2 percent ahead of last year's record pace of nearly 23,000 units.

Larry Murphy, president of SalesTraq, said the remainder of 2002 would likely be slower than the second half of 2001.

"We had more than 50 percent of our sales in the last half of 2001, so the second six months of the year were stronger than the first six months," Murphy said. "I'd be surprised if we maintain last year's second-half pace. We started the year saying we were going to break last year's record, but we're no longer forecasting that. We're forecasting a tie."

Part of the reason new-home sales are likely to slow in the next few months revolves around supply.

Murphy said less than 20 percent of the valley's new-home subdivisions offer "standing inventory," or homes available for immediate occupancy.

Also, home builders are actively selling just 287 subdivisions in the valley, a 13 percent decrease from the 330 active subdivisions consumers could choose from a year ago.

The market's low new-home inventory is running head on into sustained immigration into the area.

Economist Keith Schwer, of UNLV's Center for Business and Economic Research, said last month that he anticipates 100,000 new residents to move to Southern Nevada in 2003.

"We've got to figure as many people still need housing as is normal for us," Murphy said. "Everybody has to have a place to live."

Murphy said the market's constricted supply will expand next spring, when homes begin to come online at Aliante, the North Las Vegas masterplan that American Nevada Corp. and Del Webb Communities are developing.

Murphy said sales at Silverstone Ranch, the former Mountain Spa site that Pulte Homes bought from Jack Sommer in June, will also add to the valley's new-home supply next spring.

The current tight supply is revealed in the valley's median new-home price, which rose to $178,000 in July, a year-over-year increase of 7.4 percent.

However, the median price price declined when compared to June's median, which was $183,000.

"We are still heading toward $200,000, but not as quickly as we thought," said Larry Murphy, president of SalesTraq.

Murphy attributed the month-to-month drop in median price to the types of homes being sold.

"In July, we had a smaller average square footage. Sometimes a builder will come online and sell a lot of $100,000 condominiums. They'll be selling smaller homes and less expensive homes, but they'll sell more of them. You end up with the median price coming down a bit."

Existing-home closings are poised to easily surpass last year's sales.

July resales totaled 3,446 units, a 29 percent increase over sales totals in July 2001.

In the first seven months of 2002, homeowners and real estate brokers sold 21,747 existing homes. That compares to 18,278 existing homes sold in the first seven months of 2001.

The median price of an existing home in the valley rose to $148,000, a 6.5 percent increase from a year ago.

SalesTraq's data showed resales spend an average of 53 days on the market, and sellers are receiving 101 percent of their asking price.

Murphy said it's the first time since he's tracked numbers that sellers are receiving more than 100 percent of their asking price.

"It's a sign of a really hot market," he said. "When you get into multiple-offer situations, the owner has the option to reject all the offers and let everyone come back with a higher offer."

Separately, Denver-based M.D.C. Holdings, which builds in Las Vegas as Richmond American Homes, reported a significant increase in home orders in August compared to the same month a year ago.

The builder nearly doubled its Las Vegas home orders, from 64 in August 2001 to 120 orders last month. M.D.C.'s company-wide orders rose 35 percent in August, to a total of 839 homes. That compares to 621 home orders in the same month a year ago.

M.D.C. attributed the increase in home orders to a boost in the number of its actively selling subdivisions. The company purchased the Las Vegas assets of John Laing Homes, which included 1,600 lots in four communities, in April.