Lennar has taken over the top spot from KB Home as the No. 1 volume builder in Las Vegas through the first six months of 2022 and northwest Las Vegas has emerged as the top area for home sales.
Lennar finished 12 months of 2021 as the No. 2 builder in Las Vegas from KB Home but through the first six months of 2022 it had 1,055 net new-home sales, edging out the Pulte Group with 805 and KB Home with 802, according to Las Vegas-based Home Builders Research.
■ In a market impacted by the supply chain and rising interest rates, Lennar said its net sales declined 3 percent from 1,086 in the first six months of 2021.
■ A year ago, KB home, which ranked No. 3 this year, led at the midyear rankings with 1,308 net sales. Its numbers declined 39 percent compared to a year ago.
■ In taking the No. 2 spot, Pulte Group saw sales fall 4 percent from 841 during the first six months of 2021.
■ D.R. Horton was ranked No. 4 with 699 sales, a 13 percent increase over the 620 from January to June 2021.
■ Richmond American was No. 5 with 438, a 20 percent decline from 546 in 2021.
■ Touchstone Living was No. 6 with 360 sales, a 5 percent decline from 377 in 2021.
■ Beazer Homes was No. 7 with 261 sales, a 16 percent decline from 312 in 2021.
■ Tri Pointe Homes ranked No. 8 with 260 sales, down 39 percent from 428 in 2021.
■ Century Communities was No. 9 with 238 sales, a 57 percent decline from 559 in 2021.
■ Rounding out the top 10 was Toll Brothers with 222 sales, a 36 percent drop from 345 in 2021.
■ Just outside the top 10 was Taylor Morrison with 212 sales, a 29 percent decline from 297 in 2021.
Taylor Morrison was followed by Woodside Homes (139), Harmony Homes (123), Storybook Homes (75), Shea Homes (70), Signature Homes (34), Pinnacle Homes (30), Warmington (23), Summit Homes (15) and Paragon Life (10).
■ In breaking down the sales by area, Home Builders Research reported the northwest valley emerged as the leader with 1,504 sales after finishing fourth at the midyear point in 2021. The northwest had 1,451 sales in the first six months of 2021.
The northwest has seen a lot of builder activity from the northern end of Summerlin and its newest communities of Redpoint Village, Redpoint Square, Kestrel and Kestrel Commons with a mixture of attached and detached products.
Home Builders Research President Andrew Smith said in addition, Shea Homes, Lennar and Woodside homes are selling new homes in the northwest and so is the Skye Canyon master plan.
“Skye Canyon has a little higherdensity than they did (previous phases) and the new area of Summerlin is more dense than previous phases,” Smith said.
■ No. 2 is the southwest valley with 1,291 sales, down from 1,758 a year ago when it ranked first.
■ No. 3 is Henderson with 1,276 sales, down from 1,579 a year ago when it was ranked No. 3.
■ Dropping from the top spot to No. 4 is North Las Vegas with 1,081 sales, down from 1,860 in 2021.
Smith said North Las Vegas’ decline has been interesting to watch and attributed it to communities selling out. He also said permits have been down in recent months and isn’t sure if that is a processing issue or a timing of submitting plans.
“I was surprised to see that much of a slowdown in activity after being so strong for two to three years,” Smith said.
The northwest valley also had the highest new-home closing price in the first half of the year at $552,934, up 14 percent from a year ago.
It was followed by the southwest valley at $500,219, a 13 percent increase.
Henderson was third with a median closing price of $486,130, a 15.5 percent increase.
North Las Vegas was next with a median price of $416,00, up 20 percent over last year.
Summerlin had the highest median closing price among master plans at $721,728, a 23 percent increase over the first six months of 2021.
Lake Las Vegas was No. 2 at $583,592, a 10 percent decline.
Skye Canyon in northwest Las Vegas was No. 3 at $541,508, a 21 percent increase.
Cadence in east Henderson was next at $481,123, a 17 percent increase.
Inspirada in west Henderson was $469,786, a 12 percent increase.
The Villages at Tule Springs in North Las Vegas was $437,070, a 19 percent increase.
Valley Vista in North Las Vegas was $415,100, a 20 percent increase.
Aaron Hirschi, president of KB Home’s Las Vegas division, said the decline to No. 3 on the midyear ranking was a function of the builder’s community count. The first half of the year was an “in-between period” in which several communities closed out before others opened, he said.
“We have now opened five new communities in 2022, and we have another nine coming up before the end of the year,” Hirschi said. “We’re starting to see momentum pick back up.”
Hirschi said interest rate increases have created some headwinds for the industry as payments have gotten larger and squeezed some first-time buyers. He said they’re positioned as an affordable builder going forward.
Smith said the housing market is in a transition as builders and buyers adjust to the marketplace with higher interest rates and less traffic. Some builders are even switching up their strategy compared to the past couple of years when they couldn’t sell homes fast enough, he said.
“We’re hearing about traditional activity such as rate buy downs, buyer incentives and bringing back commissions for buyers’ agents,” Smith said. “When you look at the numbers and articles out there, it seems a little worse than it actually is. People in the industry are saying this is a transition phase where people on both sides are getting used to a different situation. If it doesn’t improve, they are expecting more of a plateau as opposed to a continued downward trend. They expect it to taper off by the end of the year, hopefully.”
Nat Hodgson, CEO of the Southern Nevada Home Builders Association, said the market has changed dramatically in the last six months and it’s like there are two separate years.
“For the first time since I had this job, I can’t even look at a crystal ball and give my projections because people are sitting on the sidelines because of the interest rates, it’s hot and they are uncertain where the world is going,” Hodgson said. “But people are still migrating to the state. We’re going to have a bigger housing shortage than we had at the (beginning of the pandemic) if we don’t keep building.”
Home Builders Research reported new home net sales (new sales minus cancellations) fell for the fourth straight month in July. The total of 434 was again the lowest monthly total since the start of the pandemic and looked more like monthly totals seen in the winters of 2015 through 2018 Smith said. Cancellations decreased month to month overall, but the cancellation percentage (cancellations divided by gross sales) jumped to over 30 percent for the first time since May 2020, Smith said.
Monthly cancellation rates at that level have not been the norm since 2006 through 2008 and even 20 percent or more has been rare since 2014, Smith said.
Buyer traffic also decreased rather sharply (down 19 percent) month-to-month and was also at a level (13,477) that is usually reserved for the winter months, Smith said.
August also has not started well in terms of net sales for local homebuilders but Smith said he wondered if the current softening of mortgage interest rates will help performance.
Smith said he thinks sales could pick up in the fall as interest rates have even gone down and that people realize the costs won’t get any cheaper if they need to buy. Builders are offering incentives, but that comes off their profit and they can’t continue to do that, he added.
“They are only trying to do that to keep the momentum, and you can only do that so long,” Hodgson said. “This will pass and it will be short-lived but the whole nation is going through it. You couple inflation with normal cost increases and interest rates, which is bigger than inflation. I saw cancellations come down to a reasonable number last week so maybe we have four to five weeks of bad numbers, but let’s get over it and get back to normal.”
The slowdown in sale hasn’t led to any big reduction in prices
Smith said the base asking prices peaked at an average of $558,386 in May but his latest figure from the beginning of August was $550,465, a drop of 1.4 percent.
