Hey there, home enthusiasts! We’ve got some exciting news for you straight from Las Vegas. The city’s homebuilders are gearing up for an action-packed 2024, and they’re brimming with optimism. But hold onto your hardhats because there’s a twist – a land shortage that’s affecting affordability. Join us as we break down what’s happening in the world of Las Vegas home construction.
A Positive Pulse in the Homebuilding World
Las Vegas homebuilders recently gathered at the annual Southern Nevada Home Builders Association breakfast, and the atmosphere was electric. With 170 industry professionals in attendance at The Orleans, the buzz was all about the bright future of home construction in the city.
2023: A Year of Growth
2023 was a game-changer. After a somewhat sluggish second half of 2022 due to rising interest rates, Las Vegas witnessed a remarkable 22 percent increase in net sales for new homes. The good news didn’t stop there; interest rates have been on a downward slide since October and are now under 7 percent. Builders are also pulling out all the stops with incentives to attract eager buyers.
The Sports and Entertainment Connection
What’s the secret sauce behind this newfound optimism? It’s all about sports and entertainment. Las Vegas has been on a winning streak, adding sports teams, hosting major events, and becoming an entertainment hub. The result? A significant boost to the homebuilding industry and a magnet for new residents.
Kent Lay, division president of Taylor Morrison, believes this trend will create demand across the board, from entry-level buyers to luxury seekers. “It’s going to bring more money into the city,” he says, excitedly.
A Magnet for Wealthy Newcomers
Frank Wyatt, president of Pinnacle Homes, weighed in on the impact of high-profile events and teams. “There are more people (who) have a lot of money that are moving to town in higher numbers than ever.” This influx of affluent newcomers is transforming the housing landscape.
A Look Back and Ahead
Carlos Zuluaga, board president of the SNHBA with Tri Pointe Homes, marveled at how Las Vegas has evolved. He said, “It’s amazing for our town,” reflecting on the incredible transformation of the sports scene.
Adapting to the Changing Times
Chris Armstrong, senior vice president with the Olympia Cos., talked about how the market has shifted. They’ve recently introduced custom lots catering to the changing demographics of Las Vegas buyers. “With the influx of everything that supports the entertainment and sports industry, it’s created a different buyer who is highly refined as well,” Armstrong noted.
The Land Dilemma
Now, for the twist in the tale: there’s a shortage of available land. Builders continue to face challenges due to limited land and the lack of action from Congress to make more federal land available for development. This shortage drives up home prices, making them less affordable for the average buyer.
“We live and work in a land-constrained community,” said Wyatt, highlighting the constraints Las Vegas faces. The cost of land plays a significant role in determining home prices, and unfortunately, it’s not getting any cheaper.
The Call for Action
Aaron Hirschi, president of KB Home’s Las Vegas division, expressed concern about Congress’s inaction. “The pickings are getting pretty slim out there in terms of developable land, and we need to do something about it.” He called on elected officials to step up and address the issue before it becomes a crisis.
The Complex Land Issue
Armstrong shed light on the complexity of the land issue in Congress. Competing interests, including land preservation and recreational use, make it challenging to find a solution. The lack of land supply has a direct impact on home prices, creating affordability challenges.
Thinking Outside the Blueprint
With limited land available, builders are getting creative with their plans and products. They’re exploring new strategies until more land becomes accessible.
Keeping it Local
Some builders are choosing to stay within the Las Vegas Valley, focusing on in-fill development to meet the demand. Hirschi shared that KB Home prefers to concentrate efforts in the valley and explore creative options for development.
Lay pointed out that Taylor Morrison has significant land holdings in Pahrump, just a stone’s throw away from Las Vegas. The attraction? Greater affordability. If Congress takes action on the land’s bill, it could open up valuable options for builders.
The Commute Solution
Lay added, “It’s not a bad commute. From Downtown Summerlin to Pahrump is 40 to 50 minutes.” So, if you’re looking for an affordable home just a short drive away from the city’s action, Pahrump might be your ticket.
That’s a wrap, folks! Las Vegas homebuilders are gearing up for an exciting 2024, fueled by the city’s sports and entertainment boom. But they’re also grappling with a land shortage that’s impacting affordability. As they get creative with their plans, we’ll be keeping an eye on how this story unfolds. Stay tuned for more exciting updates from the world of homebuilding in Las Vegas!
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