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August 1, 2014

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New homes springing up amid abandoned developments

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Steve Marcus

A heavy equipment operator works in an area being prepared for residential development near Horizon Ridge Parkway and Gibson Road in Henderson Wednesday, June 1, 2011. The defunct Vantage Lofts project is in the background.

New Home Construction

Model homes are shown under construction at a residential development site near Horizon Ridge Parkway and Gibson Road in Henderson Wednesday, June 1, 2011. The defunct Vantage Lofts project is in the background. Launch slideshow »

On one side of Gibson Road in Henderson sits Vantage Lofts, a cluster of half-finished structures developers once dreamed would house modern condominiums with sweeping views of the Strip. Touted as an alternative to the typical suburban home, the $160 million development broke ground in 2005.

Today, it sits empty. Chicken wire pokes from unfinished patches of stucco. Plywood covers holes where windows should hang. Shards of glass litter an entryway to the sales office.

Across the street are three more half-finished structures — single-family homes. But these are not abandoned. In fact, every day construction workers add more touches. Soon, families will tour them and perhaps buy one of the dozens of houses planned for the development.

A monument to the overbuilding of the boom sits next door to, well, more building. It’s a puzzling sight.

Why build homes when existing stock is so plentiful and cheap — and empty? In a city wracked by unemployment, foreclosure and out migration, new housing projects are counterintuitive.

Yet new housing developments are slowly springing up across the Las Vegas Valley as abandoned projects fall into disrepair.

Developers, real estate experts and housing analysts say the strategy of building amid the ruins of the boom is a sound one. There’s demand for new homes. And although more building is likely to push underwater homeowners further into the deep, it could help reignite the local economy, they say.

“Not everyone likes a used house,” said Dennis Smith, a real estate analyst and the president of Home Builders Research. “Prices are low enough that a lot of people are looking at new homes. They’re selling for historically low prices.”

In Henderson, KB and Ryland Homes are developing vacant land at Horizon Ridge Parkway and Gibson into plots for more than 200 single-family homes. The planned communities, which will sit side by side, are the second and third single-family developments to break ground in Henderson in three years.

They signal economic renewal, city Planning Manager Michael Tassi said, but are far from the beginning of a resurgence. During the boom, Tassi’s department saw three projects break ground every week.

Still, more housing developments are in the pipeline. At the same intersection where the KB model homes are going up, three more plots have been approved for housing. Most of the developers, including KB and Ryland, plan to build the homes after they are sold.

“These developers and homebuilders, their job is to build houses whether they sell quickly or slowly,” said Chris Thompson of RCI Engineering, the firm working on the KB and Ryland projects. “But I don’t think anybody is just building houses these days” without buyers lined up.

Developers learned that lesson from the bust. Years after the economy crashed, new homes in communities built at the end of the boom remain vacant. Many can be found blocks from KB’s newest models. There’s Mountain Terrace (grand reopening!), Bella Terrace Apartments (check out our specials!) and Village South (pool size lots!).

In that regard, the build-as-they-sell approach makes economic sense. If only 50 homes sell, only 50 are built.

But it also opens the door to the possibility of half-constructed communities. Case in point: Just west of the new Gibson development is the posh La Luz community, with beautiful welcome gates and only four houses. Three are bank-owned and for sale. Signs still advertise the rest of the development — “coming soon” — which has sat as vacant desert for years.

Housing analysts predict such a situation won’t be repeated with the developments being built. Each month, 300 to 400 new homes sell in the Las Vegas Valley, making up about a quarter of all home sales. Although the experts admit they have no crystal ball, many anticipate a stronger market for new housing this year than last.

Homebuilders are trying to anticipate what buyers want: bigger closets, fancier kitchens, office nooks as standard features and no dining rooms. The new houses look markedly different even from homes built five or six years ago.

Smart developers also have positioned themselves against “hard to repair” foreclosures and slow-moving short sales.

“With a foreclosure you don’t know what you are getting,” said Steve Bottfeld, a housing market analyst and the executive vice president of Marketing Solutions. “Most neighborhoods that have one foreclosure have more than one foreclosure, so you have no idea what your neighborhood is going to look like in three or four years. People don’t buy new homes to rent. People buy new homes to live in.”

Remove buyers’ preferences from the equation and Clark County needs less, not more, housing. About 16,000 homes are for sale at any given time in Las Vegas alone. Nevada has had the highest foreclosure rate in the country for 52 months straight. One out of every 97 homes are in foreclosure. And people are leaving the area faster than they are moving in. Patient buyers can snatch up distressed properties for pennies on the dollar.

But many aren’t willing to take the risk. And new houses are often only negligibly more expensive than old ones.

Residents who buy into KB’s Versante or Ryland’s Zephyr Ridge developments could get a deal. The KB houses, from 1,700 to 2,500 square feet, start selling from $180,000. The new neighborhood could be booming in a few years.

Meanwhile, there are still no plans to resume work on the abandoned Vantage Lofts.

The property was supposed to go up for sale at a recent tax auction but was pulled from the block at the last minute. It still sits half finished.

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  1. Large investors may be able to buy some of these foreclsoed homes for pennies on the dollar because they are able to buy in blocks. Individual home buyers are not getting these homes for pennies on a dollar. Many of the foreclosed homes are selling for 50% or less than what they were initially purchased at but a buyer will also be spending additional monies to make the house liveable unless it is included in their financing. Steve Bottfeld is right in saying that buying in a new home community certainly increases the chances that you are living in a community of owner occupied homes. I just purchased a NEW home and that was the main reason for doing so.

  2. "A monument to the overbuilding of the boom"

    Overbuilding? Las Vegas had a 20-year boom until the crash. Had the crash never happened, the valley wouldn't be considered "overbuilt." In 2002, some neighborhoods would sell ("used") houses within hours of listing them, and ("new") communities would see people camping out to be in line to go to contract as soon as the sales office opened.

    It's easy to be a Monday morning quarterback, harder to offer a balanced perspective taking into account all the facts.

  3. (FWIW, Dennis Williams doesn't live anywhere near Southern Nevada.)

  4. Very interesting design. It looks like something that would be located in a downtown environment not on the outskirts of town.

  5. Why do all the morons come here to test their cockamamie ideas? Maybe they should add a Ferris wheel to the development to insure it's success?

  6. I also think it's silly to be building new inventory, while having excessive inventory right now. I was debating on purchasing, then I found a 2 bed 2 bath w 2 car garage with a big back and front yard for 70k. No hoa's, established neighborhood, and my payment is less than 625 for 15 years. Took awhile to find it, but it came through. I recommend to people looking to buy and are getting beat out by investors, is to try homepath.com. I didnt buy through there, but i recommend checking it out Checkout their first look program, gives u a much better chance at getting a home. If u plan on staying in Vegas, I would buy.

  7. @allaroundtown
    Just want to know what MERS is please enlighten me thanks.

  8. I just found what MERS is thanks though.

  9. I can understand why the Vantage Lofts are defunct, even without the bust. Talk about urban blight. Talk about an Orwellian vision of life in little cubes.

    As the wife and I visit many different neighborhoods looking to buy a "home" (vs a house) it is amazing to me the lack of imagination and creativity I see in the projects developed since 2000. We have looked at a couple of dozen existing homes in a dozen different neighborhoods around the city and most are little different from any other. Floor plans, kitchens and bathrooms differ little from one another unless you look to expensive custom homes. Tiny lots and cookie cutter designs are all too common. Apparently developers in LV have been given a free hand and little in the way of guidance or controls by the cities and county. Many homes built 4 to 10 years ago still have side and back yards amounting to nothing but rock inside a block wall.

    With all the gnashing of teeth over HOAs and all the attention they are getting from the media and the legislature, you would think they would do something besides sue homeowners and turn accounts over to collection agencies who apparently were formed from vehicle towing companies.

    That is a shame as individuality is a big draw and boring repitition is not. Tract homes exist in most cities across the nation today but seldom have I seen such a lack of passion allowed to be so prevalent throughout and entire town.

    I guess it could be me but it seems we could take a lesson or two from many other cities that have required more of the real estate developers who come to town seeking big projects and big profits and more from the HOAs who seem to do little but give folks a hard time. Judging by the dead lawns, brown landscaping and generally unkempt blocks we have seen, they do little besides paper shuffling. I thought monies collected were to keep up general areas and unoccupied properties rather than just ignore them other than sending out notices of violation and turning accounts over to collection companies.

  10. It is SHAMEFUL that banks are: holding onto properties, not being willing to negotiate with buyers and sellers, and continue to not work with struggling homeowners whose properties took a nosedive!
    SHAME SHAME SHAME ON BANKS TOO BIG TO FAIL!

    Because we are out in a DESERT and water is SCARCE, and new building is UNSUSTAINABLE in terms of water and energy resources, new building should cease. The exception would be to take an already existing lot with structures, clear it of old structures and build new on it. That would be fair to those property owners.

    Otherwise, reality will eventually catch up will people. There are parts of the country where folks have built without taking water into account, and now have to haul their water to their homes and businesses regularly. Here in the U.S.A.!