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April 20, 2014

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HOUSING:

Along with growth, suburban town limited housing pain

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Boulder City

Few speculators rolled the dice on real estate in Boulder City during Clark County’s housing boom — and not because gambling is illegal there.

The town of about 17,000 can thank its slow-growth ordinance for keeping investors at bay and helping stem real estate market losses.

“In Las Vegas and Henderson, so many homes were built, it was overbuilt. That didn’t happen here in Boulder City,” said Starr Needham, the real estate agent who is selling in the town’s only new-home development, Tuscany Retreat.

Boulder City limits building permits for new homes to 120 a year, with each developer restricted to 30 annually. That makes a development of hundreds of homes, which was common in many parts of the Las Vegas Valley during the boom years, impossible. Many of those subdivisions are at the heart of the current foreclosure crisis.

In the valley, “right now, it’s a terrific feeding frenzy on repossessed homes,” said Russ Gilmore, a broker for Lake Mead Realty, which has a “Foreclosure Listings” sign in its window on Boulder City’s main drag.

But usually only a limited number of foreclosures are available at a given time in Boulder City. And the town’s significantly lower foreclosure rate, combined with the limited supply of new homes, has helped keep Boulder City’s home prices higher than in the valley, real estate professionals say.

A Las Vegas Sun analysis of home sales and foreclosures in June and July of the past five years shows Boulder City’s relative strength in a tough market.

The foreclosure rate in Boulder City was 0.6 percent from June 1 to July 22, compared with 2.7 percent in the rest of Clark County. So roughly one home in 40 in Las Vegas went into foreclosure in that time, compared with one in 180 in Boulder City.

And although the median home price in Las Vegas has fallen 58 percent since the 2006 peak, it has fallen 36 percent in Boulder City. The median price per square foot of a home in Boulder City was $150 in June and July, almost double the $78 per square foot in the Las Vegas Valley.

“We’ve never had more than five or six foreclosures on the market at a time, and they usually sell quickly enough,” said Bret Runion, owner of Desert Sun Realty. “As long as they are priced right and sell quickly, they don’t do as much damage to the market.”

The low foreclosure rate has widened a long-standing gap between home prices in Boulder City and the rest of the county.

In 2005 the median price per square foot for a Boulder City home was 27 percent higher than for a comparable home in the Las Vegas Valley. This year, it was 93 percent more.

The fact is that Boulder City since its founding has been able to command higher prices for homes, historian Dennis McBride said. A key reason was that until 1959, when Boulder City was incorporated, the federal government ran the town and kept development to a minimum.

“There was no large-scale development until the 1950s,” McBride said. And even then, it was limited.

That was OK with many residents. One of the town’s first real estate agents, Elton Garrett, was known for interviewing potential buyers for their suitability as neighbors before showing them homes in Boulder City.

After the feds turned the town and its property over to a City Council, however, elected officials went on a selling spree to allow land around Boulder City to be developed, McBride said.

It didn’t take long for some residents to decide development was getting out of hand, and they formed a committee to write the controlled-growth ordinance. It was passed by voters in 1979.

The real estate community hated the idea, said former Councilwoman Andrea Anderson, who was a Realtor at the time. But it turned out to be one of the best things to happen to Boulder City — and to the real estate professionals, she said.

“It was our salvation,” Anderson said. “What it did was great. We had less to sell, but it sold at a higher price.”

How much less is evident in housing inventory growth during the boom years, 1990 to 2008. Clark County’s increased 230 percent, but Boulder City’s grew by only 26 percent.

The town’s slow-growth policy would be difficult to sustain without Boulder City’s proximity to Las Vegas, real estate experts say.

The nearby metropolitan area provides jobs for Boulder City residents, an added customer base for its Realtors and other businesspeople, and tourism for its shops.

“If I could earn all my income doing nothing but Boulder City, I would be happy. But it’s not possible,” said Gilmore, a 25-year resident. “There’s not enough inventory.”

Las Vegas also provides a stark contrast that makes Boulder City feel more unusual than it might anywhere else in the nation.

“You can do anything in Las Vegas,” Cokie Booth of Boulder City Realty said. “But Boulder City is a suburb still. You can get away from the city life and live the small-town atmosphere.”

Added Runion: “Boulder City is the only alternative if you don’t want to live in the hubbub. And of course, it’s the only city without gambling.”

But Boulder City, with its lower foreclosure rate, may also be a reflection of where the market in the rest of the county would be if the real estate bubble had not gotten so big, Needham said. Although the volume of transactions is high these days in Las Vegas as buyers take advantage of falling prices, it has been kind of slow in Boulder City, he said. Volume at Tuscany Retreat, after more than a year of sales, is just reaching a level he considers reasonable.

“Maybe this is a true picture of the amount of transactions that should be done,” he said.

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