The Las Vegas Market Watch found some interesting facts for the “New Home Market” in the first quarter.
The new home sales count for March was 453. It brought the 2014 1st quarter total to 1,287 new home sales.
There is confidence that the new home closing numbers will rise somewhat in the coming months.
The median price of the new home closings in March was $285,475, down from a high of $300,000 in the last six months.
The median price has been pretty flat and actually softened during the last 3 months as shown on the graph.
The steady, improved job growth and a growing population are certainly good things to see, but there is still a way to go before consumers and businesses feel “warm and fuzzy” about the future. Check out the current statistics in the previous blog, and you will see the numbers going in the right direction.
Las Vegas continues to capture many sales from people relocating to Las Vegas, and the trend continues as shown in the population growth. With the recovering economy we should expect improving demand for housing.
There are still many consumers who have been “stuck” in their homes due to the lack of equity. They report that they will sell their home and move into a new home when they have the funds to do so. So, the pent-up supply of buyers continues to increase.
The new home permits took a very nice jump in March, with 549 pulled by builders. The first quarter ended with 1,385 permits being purchased by home builders in the metro area. That puts the first quarter figure at 23 percent less than the 1st quarter of 2013.
Dennis Smith of The Las Vegas Market Housing Letter reports that the monthly permit totals will increase through the summer because the contract orders for new homes are still looking pretty good.
The pie chart above displays the market share of the net sales during the 1st quarter of 2014. It might seem remarkable that 68 % of all the net sales during the first quarter came from only two sub-market areas, the northwest and the southwest. In the past, the area market share of new home sales was more disseminated around the valley but has become more concentrated in locations near the active master plans because that is where the best available supply of lots has been located.
As the supply of replacement lots in the Mountain’s Edge master plan in the southwest part of the metro area continues to recede, the southwest area's market share will also decline. There is nothing “on the horizon” in the southwest area to replace it.
The northwest and North Las Vegas (NLV) share will increase, with probably the biggest improvement taking place in North Las Vegas. Relative to the rest of the Las Vegas Valley, there is a lot of land in NLV, and the next major master plan opening will be Park Highlands.
There were about 15,000 homes planned at Park Highlands (PH), which straddles the 215 Beltway in NLV near the Aliante Hotel. But PH was a casualty of the great recession/depression in Las Vegas.
Originally, investors paid about $639 million for the land from the BLM. After a bankruptcy and the Great Depression/recession, Crescent Bay Holdings bought it for just over $21 million. (This is a good example of what happened to land values in some parts of southern Nevada.)
Crescent Bay and Sun Cal Development, which owns about 114 acres in PH West, are expecting a final vote from the NLV city council on May 21st on a revised development agreement that basically splits the PH master plan into PH East and PH West, with the Aliante golf course acting as the dividing "line."
PH West will consist of about 4,000 lots on 600 acres. The larger PH East will hold about 11,000 homes, which the developers hope will begin pulling new home permits by the end of 2015.
The Resale Market First Quarter
We counted 2,854 recorded resales in March, bringing the 1st quarter total to 8,052. This is a decline of 2,613 transactions, or 24.5%. The median price of the March resale closings was $171,000.
This is a one-month increase of $6,000, or 3.7 percent. The increase breaks the recent 7-month flat median price trend, and although we don’t like to place a lot of “hoorah” on a one-month change, this is something we have been expecting for some time.
The decline in the number of REO sales should by itself cause the traditional resale prices to rise. We know there should always be a pricing gap in the REO and short sale listed prices and the traditional listings.
So, even though the number of resale transactions (bye, bye to the investor sales) has declined, the prices should slowly move upward. Slowly is the key word here. Check out all the available homes on my website.
Thanks to Dennis Smith for his charts and facts.
“The Las Vegas Housing Market "Letter"—April 19, 2014
Home Builders Research, Inc.,
