Amid high prices, Las Vegas house hunters are gravitating toward more affordable projects, and sales are slumping in some communities.
Builders closed 1,029 new-home sales in Southern Nevada in September, up 13.3 percent from the same month last year, bringing the year’s sales tally to 7,972, up 18.4 percent from the same nine-month period in 2017, according to a report Monday from Las Vegas-based Home Builders Research.
The median sales price of last month’s closings was $375,190, up 6.9 percent year over year.
Las Vegas builders have fetched rapid sales and record prices this year, and last month’s results do not show that the construction market has slammed on the brakes. But sales have dropped in several master-planned communities, and the region’s weekly deal flow has ticked lower.
Builders reported fewer net sales in the third quarter compared with the same period last year in half of the valley’s top-10-selling communities, including Summerlin, Inspirada and Cadence, according to Home Builders Research, which noted that master-planned developments typically command higher prices than projects outside their boundaries.
Also, the average weekly net sales per subdivision in the third quarter was 0.7, down slightly from 0.8 in the same period last year, and builders pulled 707 new-home permits last month, the lowest tally since January 2017.
“Are new home sales softening? Overall, yes, we are seeing a dip in average sales per project per week,” said the report, by Home Builders Research President Andrew Smith and founder Dennis Smith.
But the downshift “is coming off of an extremely strong first half of the year,” and buyer traffic at sales offices remains strong, they wrote, adding that house hunters may be “slightly more cautious” or priced out altogether because of rising mortgage rates.
Still, the latest numbers show the importance of affordably priced homes and “the increased market share they are commanding” in Southern Nevada, the Smiths wrote.
For one thing, there seems to be ample demand for townhomes and condos, which are typically less expensive than single-family houses. Builders closed 1,009 sales of attached homes this year through September, up more than double from the same period in 2017.
Builders also reported year-over-year increases in net sales in the third quarter in North Las Vegas and the east valley, two areas known for lower-priced houses, but fewer sales in the southwest valley, the northwest, the south valley and Henderson.
Additionally, half of Southern Nevada’s top-10-selling subdivisions offer homes with an average base price below $300,000, the Smiths reported.
“Now, is it normal for lower priced projects to produce a higher volume of sales?” the Smiths wrote. “Obviously the answer is yes.”
Content provided by Eli Segall, Las Vegas Review-Journal