East side of valley seen as most affordable housing

Jennifer Shubinski

Friday, Jan. 21, 2005 | 11:02 a.m.

Las Vegans looking for an affordable home last year most likely wound up in the east side of town, where housing prices were the lowest in the valley.

Housing prices on that side of town, an area roughly defined as south of Interstate 15 and north of Boulder Highway and Russell Road, were significantly lower than the valley's median new and resale home prices, Larry Murphy, president of SalesTraq said Thursday during a seminar that examined 2004 real estate trends.

The median price of a resale home in 2004 rang in at $160,000 on the east side of town. The valleywide median resale home price at the end of 2004 was $231,563, according to SalesTraq. Another local research firm, Home Builders Research Inc., reported today that the median price of a resale home in December valleywide was $250,000, a year-to-year increase of $70,000 or almost 40 percent.

The median price of a new home in 2004 on the east side of the valley was $186,100, compared with $252,732 valleywide, according to SalesTraq. Meanwhile, Home Builders Research also reported today that the median price of a new home in December valleywide was $290,287, a year-to-year increase of $80,676, or 38.5 percent.

The reason the east side may not have kept up, pricewise, with the rest of the valley is because it is plagued by constraints that other areas of town to not have.

The area has almost no room to grow because of Nellis Air Force Base to the north, Sunrise Mountain to the east and older developments and freeways to the west and south.

Areas around military bases also have historically had lower housing values than other parts of town, local experts said.

And while the east side of town has numerous large housing developments, it lacks a master-planned community, which generally boosts prices and desirability for an entire area.

But while the east side of town may be the most affordable place in the valley to buy a home, it too has experienced large appreciation rates -- just not as large as the rest of the valley.

Housing prices on the east side of town last year experienced a 23 percent increase over the previous year, Murphy told a standing-room only crowd of about 600 real estate agents, bankers and developers Thursday.

That compares with other areas of town such as the southwest and Henderson that both experienced 44 percent price appreciation and the north that had 41 percent appreciation.

Moderately priced housing is fast disappearing from all areas of town, even though resale housing prices have remained flat for the past six months at $250,000, Murphy said.

In 2004 there were 99 new homes sold for under $100,000, compared with 216 new homes in 2003 -- a 54 percent decrease, Murphy reported

Lower-priced resale homes also are becoming scarce.

In 2004 there were 4,094 resale homes sold for under $100,000, compared with 6,358 in 2003, a 35.6 percent decrease, Murphy reported.

"This is quickly becoming an endangered species," he said.

What the valley is seeing more of are homes priced at $1 million or more.

There was a 138 percent increase in the number of resale homes priced at $1 million or more, with 535 in 2004 and 107 in 2003, Murphy reported.

New homes priced more than $1 million also saw a huge jump -- almost 91 percent, with 204 new homes selling in 2004 as compared to 107 in 2003, Murphy reported.

Steve Bottfeld, executive vice president of Marketing Solutions, who put on Thursday's presentation with Murphy, said the "affordability gap" would be filled with the apartment to condo conversion market. Many of those units sell in the low $100,000 range.

Bottfeld estimated that as many as 30 such communities would enter the market this year.

Dennis Smith, president of Home Builders Research, reported in his newsletter today that in 2004 only 667 apartment-to-condo conversions closed escrow.

Apartment conversions are including in new home sale numbers.

In December, Smith counted 3,203 new home sales, bringing the valley's total new home closings to 29,248 for the year, an increase of 16 percent over 2003.

There were 4,329 recorded resales in December, resulting in a 2004 total of 64,168 resale homes, almost 30 percent more than 2003, Smith reported today.