Despite foreclosures, builders pin hope on new home sales

Courtesy photo

Denise and Anna Mortimer look at homes in The Mesa village of Summerlin at a previous America’s Biggest Open House event.

By Becky Bosshart

Friday, March 20, 2009 | midnight

Real estate across Clark County is slumping, but Summerlin homebuilders hope that lower housing prices will bring buyers to the master-planned community's biggest open house of the year.

Despite the nationwide credit crunch and a host of consumer fright that might be stacked up against the event, which is 10 a.m. to 6 p.m. March 21 and 22, builders are hopeful the event will help move some inventory.

More than 60 model homes in 13 Summerlin neighborhoods will be showcased at this weekend's America's Biggest Open House. Buyers, or "lookie loos," can visit one of the 13 sales offices (sure to be marked with colorful balloons and big signs) for a map, or download it from the event's Web site.

The median cost of a Summerlin single-family detached home is $312,000, according to SalesTraq. That's down 32 percent from the same time last year.

Although Summerlin homes appeal to buyers in a higher income bracket, those buyers are going to be more cautious in 2009, said Brian Gordon of Applied Analysis, a consulting firm.

"The higher end of the market, which has been more insulated from the ups and downs in the market, is starting to become more impacted, given the depth of the current recession," Gordon said.

The climate has changed for sellers, too.

They want buyers who are going to be emotionally invested in the home, said Nicole Bloom, vice president of sales for Richmond American, which has built some of the homes in Summerlin.

She said buyers must be employed and pass some scrutiny to be approved.

"There are low fixed interest rates and (buyers) need to meet income and debt ratios and credit ratings," she said.

Creative financing is no longer on the table. Gone are the days of zero percent down, adjustable-rate mortgages, or option ARMs, which helped to tank the real estate market when buyers couldn't afford the payments once the interest rates adjusted, she said.

Many of the homes purchased in that fashion have fallen into foreclosure and flooded the market. Las Vegas has the highest rate of foreclosures among major metro areas.

New home builders are competing with about 21,000 homes on the market.

New homes replete with options and building guarantees offer something different, event organizers said.

"Everybody is competing with foreclosures," Bloom said. "We feel there is an extraordinary value with brand new homes with a warranty and personalized with options."

Summerlin open house organizers hope that builder incentives and prizes will encourage home ownership during a recessive economy. Summerlin sellers are offering a host of creative options for buyers this weekend to compete with the ripe foreclosure market.

Richmond American, just one of the seven builders at the open house, is offering a gourmet kitchen upgrade valued at $7,500.

Richmond is showing six higher-end home models at The Mesa. These homes are up to 3,000 square feet and range from $269,000 to $372,000.

Many builders are offering assistance with closing costs.

Woodside Homes is giving out baseballs signed by former Dodger Orel Hershiser, who lives in one of its communities, to buyers.

One sales office raffle prize is a $500 American Express gift card.

Nikkole Liesse, marketing director for The Howard Hughes Corporation, said a similar event last fall attracted about 900 visitors to sales offices.

Pulte Homes, Woodside Homes, Richmond American, Toll Brothers, William Lyon Homes, KB Home and Ryland Homes are participating in the weekend event.

Summerlin has about 35,000 homes and 95,000 residents, which includes Sun City and Red Rock Country Club and 18 villages.