It’s been quite an eventful week for the Southern Nevada building and development community, which came under the national spotlight and won awards at the International Builders’ Show at the Las Vegas Convention Center.
More than 100,000 from all over the world attended the event, in which Las Vegas builders got recognized for their achievements and the focus of attention at press conferences and tours of the New American Home and New American Remodel.
The National Association of Home Builders named Summerlin as the Master Planned Community of the Year in recognition of the year’s most outstanding work in residential real estate sales, marketing and design. The development of the Howard Hughes Corp. has Danielle Bisterfeldt as its marketing director and marketing partners of Robertson+Partners, a Las Vegas ad agency, Faiss Foley Warren Public Relations of Las Vegas and ThriveHive, a digital marketing firm with an office in Las Vegas.
Shea Homes’ Trilogy in Summerlin was named Community of the Year as part of the 2020 55+ annual housing awards program. It honors excellence and innovation in the design, development, lifestyle and marketing of housing that appeals to the mature market.
In capturing the award, Trilogy was recognized for capitalizing on its location near dining, shopping and outdoor surroundings.
Trilogy, which opened in 2018, was planned around a central club designed as an extension of homeowners’ homes, with amenities like a culinary studio, second-story sports and media lounge, resort-style pool, fitness center and movement studio.
Pardee Homes in Las Vegas won a Best of American Living Award for a production home of 2,000 square feet to 2,500 square feet for its Terra Luna Plan 1. The desert contemporary home has windows that wrap the great room and kitchen to expand space visually. It has sliding doors that connect the indoor and outdoor kitchen areas.
The judges praised the home’s floor plan and noted its interior zoning, which has the master suite tucked away from the interior social spaces and secondary bedrooms. They said they liked how the kitchen opens to the patio, the privacy given to the bedrooms, the home office and the quality of the finishes for the scale of the home.
New American Home and remodel
Dan Coletti, owner of Sun West Custom Homes, and Josh Anderson, owner of Element Building Co., got to show off their home projects during tours this week and faced questions from the national media at a press conference and at other sessions during the conference.
The New American Remodel at 7345 S. Ullom Drive took a single-story, three-bedroom ranch-style home built in 1977 and transformed it after spending $2.2 million to a two-story, four-bedroom modern style.
Coletti’s New American Home in Ascaya in Henderson and Anderson’s New American Remodel south of the Strip were touted by NAHB officials for using some of the industry’s most advanced building products and techniques to optimize energy efficiency.
Both homes are expected to achieve Emerald-level status, the highest efficiency rating of the National Green Building Standard.
The New American Home, valued at $5.75 million, is a single-story contemporary home and measures 7,096 square feet with five bedrooms and two-car garages, including one that is heated and air conditioned and can be used as a man cave.
High performance ratings were made possible by incorporating state-of-the-art green/sustainable building products. The homes feature spray-foam insulation, high-quality solar panels, automated LED lighting and energy-efficient appliances, according to Drew Smith, an energy and green building consultant, who spoke about the homes during the press conference.
Coletti said it was an exciting week for him and his team. He described the response as much greater than a year ago, when cold weather dampened the crowds who toured the 2019 New American Home in Ascaya.
“It’s been a fantastic week,” he said. “It’s probably more than 10,000 (people) who toured the home.”
Coletti and his team also participated in a forum in which they were sitting on a panel and convention attendees, as the New American Home went by on a video roll, asked questions ranging from where can they buy the light fixtures used in the house to how did the home obtain its high energy efficiency rating.
“A lot of people were interested in energy conservation because the audience was shocked by the HERS (Home Energy Rating System) of negative 13. (The average home’s score is 100. The lower the number, the greater the efficiency.)
“It spurred on people asking questions about the equipment and how much the photovoltaic cells helped the efficiency and whether the window and doors were a big part of the great rating, and was it my architectural design with the overhangs. Yes, it was, and all of those are good reasons on why we did better.”
Coletti said the home will serve as a model for his company, and the public and groups will be able to view it by contacting his office.
FHFA director talks Vegas
Mark Calabria, director of the Federal Housing Finance Agency, attended the builder show and gave an interview talking about the state of the housing market. The FHFA controls the government-sponsored Fannie Mae and Freddie Mac and is trying to end the mortgage giants’ federal conservatorships and move them to the private sector by improving their capital positions.
“I’m focused on how to make sure these entities that are such a crucial part of the mortgage market and housing market that if we do have time of stress — and I’m not saying that we are. We’ve seen very strong construction activity and reasonable price appreciation. We will see it turn at some point, but I want to get these entities to a place where they can be a floor under the market and provide a source of strength in a market environment where this is stress. If there was a major downturn in the housing market, they would likely fail.”
Calabria talked about how new construction in Las Vegas has rebounded since the Great Recession and been stronger than in other parts of the country.
“Vegas compared to the rest of the country is a place where you see healthy construction and doesn’t have some of the barriers there are in other areas,” Calabria said. “As difficult as it is to build in places like California, it puts pressure on demand here. It looks like a healthy market here, but with the in-migratio,n you’re going to struggle to keep up with that.”
Calabria predicted there will be another year to two of stable interest rates that should help the housing market that he said is probably in the eighth or ninth inning of this cycle.
“I think we will have a downturn at some point, but I just don’t think it will be soon,” Calabria said.
Optimism for housing
This year’s builder show was one of optimism for the national housing market overall, with predictions that the South and West, where there’s job creation, will do the best with new-home growth. That will be aided by low mortgage rates that will keep demand strong.
“Low resale inventory, favorable mortgage rates, historically low unemployment and accelerating wage growth are driving builder sentiment and point to single-family production gains in 2020,” said NAHB Chief Economist Robert Dietz, who predicted gains of 3 percent.
Despite that optimism, echoing issues raised by Las Vegas builders, he said that the industry is underbuilding as it continues to struggle with rising construction costs stemming from excessive regulations, a chronic shortage of workers and a lack of buildable lots.
“These affordability headwinds are impeding more robust construction growth,” Dietz said.
The NAHB said residential remodeling activity is expected to grow by 1.2 percent this year over 2019 as existing home sales improve. Dietz said he expects existing home sales to increase 3 percent nationally in 2020.
Frank Nothaft, chief economist at CoreLogic, said that home prices and rents are expected to continue to outpace inflation in most areas, with nationwide home prices anticipated to rise 4.8 percent in 2020 and single-family rents expected to rise 3 percent.
“The housing market is entering the year with a great deal of momentum from 2019,” Nothaft said. “This is the first time in post-World War II history that unemployment and mortgage rates are both below 4 percent. That will help fuel demand.”
The economists said Las Vegas isn’t alone in having a low supply of inventory of existing homes. That trend is seen elsewhere in the country, because some baby boomers are working longer and prefer to stay in their homes for now and put off downsizing. In addition, the number of adult children living at home has nearly doubled since 2000, and parents need the extra space and are opting not to sell.
Despite that, the job growth and increasing households are creating demand for homes, the economists said.
“Given the historically low number of homes for sale relative to the number of households, there is only one outlet to meet demand — new home construction,” said David Berson, senior vice president and chief economist at Nationwide Economics. “So 2020 should be a good year for new home construction.”
Berson said his firm will wait until the Democratic Party selects a presidential nominee before determining how that might impact the housing market going forward.
“Their economic policies differ substantially from Mike Bloomberg, whose economic policies aren’t that different from most Republicans, all the way to Bernie Sanders,” Berson said. “Whoever wins the nomination and their policies and economy will be very different, so we will wait and model those when we see who’s running.”