An unexpected jump in new-home permits early in 2015 has at least one local analyst looking at revising his building forecast for the year.
Builders pulled 1,849 permits in the first quarter, an increase of 464 permits, or 34 percent, when compared with the first quarter of 2014, according to new numbers from local analysis firm Home Builders Research.
Dennis Smith, president and CEO of Home Builders Research, called the activity “a great start.”
If the pace continues, expect permit pulls to pass 7,000 in 2015 — a switch from prior expectations that activity would stay relatively flat.
Helping spur permits in the quarter was a general boost in model-home traffic and sales.
Traffic jumped 26 percent year over year, to 45,703 counts, up from 36,189 in the first three months of 2014.
Sales spiked nearly 36 percent, from 1,395 to 1,895.
Traffic saw the biggest gains in the southwest, with an increase of 62 percent, and in Henderson, with a jump of 32 percent.
The most-improved markets for sales included the northwest, where closings were up 21 percent, and North Las Vegas, where sales surged 45 percent.
Sales marketwide were up 100 sales, or 8 percent, to 1,378 closings in the quarter, Smith said. The median local new-home price came in at $312,204 in March, up 9 percent, or $26,729, from March 2014.
Despite the first quarter’s overall strength, Smith said he’s not convinced that the growth rate in permits will keep up.
“‘Cautiously optimistic’ is an overused cliche, but in our opinion it is very appropriate in this scenario,” he said.
Issues that continue to hang over the new-homes market include land shortages, development costs, municipal entitlement delays and questions about where interest rates are headed in the second half of 2015.
Vacancies on the decline
Southern Nevada’s broader commercial real estate market may be on the mend, but the industrial segment in particular officially switched from recovery to growth mode in the first quarter.
That’s the word from Colliers International’s Doherty Industrial Group, which pointed in its analysis to big leaps in net absorption and steep declines in vacancies.
Tenants consumed 872,488 square feet of space on a net basis in the first three months of the year, up from 686,756 square feet in the same period of 2014. Vacancy fell to 8 percent, down from 10.7 percent a year earlier and a high of 14 percent in the first quarter of 2012.
The Henderson market posted the lowest vacancy, at 6.2 percent. The northwest fared the worst, with an average of 18.8 percent.
The most active occupying industries in previous four quarters were manufacturing, wholesale, retail and business and personal services.
The biggest sales in the first quarter included the $34 million purchase of a 309,000-square-foot warehouse building at 7000 Placid St., and the $11.1 million purchase of a 101,000-square-foot warehouse building inside Hughes Airport Center, south of McCarran International Airport.
If the Las Vegas market stays on its current path, it could return to a “healthy” vacancy rate of about 6 percent by 2016, the Doherty team said.
Contact Jennifer Robison at jrobison@reviewjournal.com. Follow @J_Robison1 on Twitter.
