Record Home Sales Projected

A record year for new home sales may be on the horizon in Las Vegas, where 2002 was “not a record year, but one to remember,” Dennis Smith, principal of Las Vegas-based Home Builders Research, said.

Locally, recorded new-home sales last year totaled 22,502, down only slightly from the record 22,940 sales the previous year.

“Despite there being fewer recorded new home sales than in 2001, we believe that 2002 was a tremendous year for many in the home-building industry in Las Vegas,” Smith wrote in his Las Vegas Housing Marketing Newsletter.

According to the report, five builders recorded 1,200 or more sales last year, accounting for a marketing share of 35 percent. Meantime, the Top 10 builders captured 53 percent of the market, up from 48 percent in 2001.

Marketing Solutions’ Steve Bottfeld, a local housing analyst, cited several factors, including historically low interest rates, that contributed to strong sales last year.

“We still had 23 percent job formation when almost all major metro areas had a decrease,” Bottfeld said. “Another reason is our housing costs are considerably less in the markets around us – the lower price and our tax structure promote people to move here. And because we have job growth, there are home buyers who can afford to make monthly payments.”

Bottfeld remained “extremely bullish” about new-home sales in 2003.

“We will have a strong first six months because we will begin to get more inventory of new homes,” he said. “Right after Sept. 11, 2001, the issuance of new permits dropped, but during the last quarter of 2002, there was a great increase in permits pulled. We have approximately 285 active new subdivisions right now. I think that number will go up to about 320 by the end of the first six months, which means that we will have enough inventory of new homes online to supply the demand.”

Bottfeld noted that new master planned communities including Aliante in North Las Vegas and Mountain’s Edge in southwestern valley, will add fuel to the housing market.

“I think that home sales will increase in the 5 percent plus range,” he said.

The median new-home price last year was $186,827, up from $178,920 in 2001, according to Smith.

On the resale side, the reported 38,621 closings in 2002 for a medium price of $157,000, up from 34,437 sales for a median price of $142,000 the previous year.
“I think that we will see the first $200,000 median price for a new home is 2003, sad as it is possible that the median price for resales will be $170,000 this year,” Bottfeld said.