New Home sales in Las Vegas are on the rise, and said to be up 42% over last year. While not anywhere near the numbers built during the boom years it's been a significant increase. Pricing on both new and resale homes has also been rising, as well as vacant land sale values as Las Vegas home builders scramble to find new parcels to develop.
But some are asking why? There are plenty of homes available in the Las Vegas Valley, tons of foreclosures and short sales, vacant homes everywhere! That's the impression so many have from the media and online comments, but in the reality of the Las Vegas real estate market, it's far from true. Resale homes available for sale in Las Vegas have been hovering around 4,000, roughly a six week supply. While many more may be seen at online search sites, the vast majority are already under contract.
Since you're likely reading this because you have an interest in new homes in Las Vegas, let me add this important bit of advice before I continue. I know many are unaware, and have had contacts from new home buyers who really needed a buyer's agent, but unintentionally gave up that right. This can be a costly mistake.
PLEASE NOTE: In Nevada, contacting a home builder by either first visiting one of their developments without your agent present or registering you, or by registering for more information online, it can cause you to give up your right to having your own agent's representation for your home purchase. As it is with the overwhelming majority of resale homes, a Las Vegas Buyer's Agent services are typically at no cost to you, the home buyer.
So why all the increase in new home sales? It's actually from many reasons, but let's start off with the obvious, supply and demand. Las Vegas home inventory has been shrinking for well over a year. In spite of the area being known as a foreclosure capital or 'ground zero'. The foreclosed homes that have come on the market over the past several years have been selling, even at record numbers that paced the boom years. The mysterious 'Shadow Inventory' that has also been heard for the past several years has failed to materialize. Combine this with a Nevada foreclosure law that went into effect in Oct. 2011, and subsequent national legal settlements with lenders that followed and slowed or averted many foreclosures nationwide, and Las Vegas has had a shortage of homes being listed.
During these past several years you've also had, and continue to have, a large number of cash buyers, usually over 50% of all Las Vegas home resales. Homes here have been considered undervalued for some time, in many cases less than the cost to build, and continue to attract investor interest for those reasons. Lately some Fannie Mae short sales have been coming back with counter offers tens of thousands higher. This after their own appraisers have valued the properties.
So the demand has been out there, and the supply has been shrinking. This has created some stiff competition and multiple offers on desirable properties, particularly under $200,000. With so many cash buyers involved, those financing can often find their offer passed over for cash. Why, you may ask? There's no worries of a low appraisal issue with a cash sale, while bank appraisals can be all over the map. Appraisals issues have been a thorn in the side for the last several years. As banks took the blame for writing loans that went into foreclosure they pointed fingers at appraisal values being too high, so those began to come in low or 'just enough' to cover the loan.
Another issue is the condition of some of the properties you may find during a resale home search. Foreclosed homes are sold as-is and can often be in need of expensive repairs and renovations. Short sale homes are typically in better condition, but may suffer from lack of maintenance, as the seller may not care to invest more in their property. Buyers may weigh any potential or hidden expenses and additional financing against buying a new home that may already feature upgrades that they want and come with a builder's warranty that is already included their mortgage payment.
There can also be energy savings that can be factored into new construction that can affect your cost of ownership. Better insulation, newer thermal efficiency windows, lighting fixtures, and heating, cooling, or plumbing systems. There may also be added family safety items, such as additional smoke detectors, CO2 detectors, and possibly fire sprinklers. Even more electrical outlets may be available in a new home, and that can be a plus for all the electronics or kitchen appliances we have in our lives today.
Yes, even our modern technology can be a factor for buying new over resale. It's not unusual for home buyers to wonder where on earth they'll put their big screen TV, as it now won't fit into that wall niche or built in entertainment center that was the style just a short time ago. A home hard wired for Internet for home office, online studies, gaming, or home theater can be a big plus.
An interesting look at 'future' technology and homes of the 21st Century is hosted by Walter Cronkite in this 1967 video. The projections for the future got some of it sort of right, big screen 3D TV, a form of 'surround sound', home monitoring video cameras, home computers, microwaves, and more. OK, so some of this stuff was incredibly bulky and crude by today's tech, and some home designs and furniture looked like it came from the Jetsons, but they did have an idea of how future homes would evolve. I guess we'll just have to hope we'll still get the fully automated kitchen that totally prepares and cooks meals, robots to do all our mundane home chores, and the 30 hour work week and full month of vacation!
Even though this future tech didn't turn out exactly as they envisioned, it still gives an idea of how our homes have changed in just the past 46 years. Home amenities that are often considered standard today, were either in their infancy or developed throughout this time. Homes became pre-wired for Cable TV then satellite years later. Home Internet service went from dial-up and DSL to wireless and broadband. TV went from bulky CRT, to wide screen DLP, and flat screen Plasma and LED, and from the living room to almost anywhere in the home. A microwave in the kitchen is now common and often built-in, but even in the mid 80's only 25% of the homes had one and by the late 90's had jumped to 90%.
New home builders have also been able to remain competitive with the foreclosure and resale home market by buying vacant land foreclosed from other builders at foreclosure pricing. Some of these parcels offered near or ready to build lots that made for additional savings they could pass along to buyers. As the number of these properties have also begun to dwindle, you're now seeing both new home and land prices on the rise, but still offering some incredible values. You'll see this in Master Planned communities that had room to build out, such as Summerlin, Mountains Edge, Providence, Tuscany, Lake Las Vegas and others, as well as many smaller infill parcels scattered across the valley. There's also been infrastructure prep work being done on a 2200 acre parcel called Cadence in Henderson that has updated it's master plan in preperation for it's Phase 1 project.
There are many choices of Las Vegas home builders, communities, and neighborhoods to be found all across the valley, in addition to resale homes. If you'd like me to assist you with your Las Vegas home search, please get in touch. You can reach me at Roberta@RobertaLaRocca.com, or call 702-354-8988. I look forward to hearing from you!