Las Vegas homebuilders’ sales activity slowed last month as house hunters again paid record-high prices for new construction. The home developers reported 935 net sales — newly signed sales contracts minus cancellations — in Southern Nevada in June, marking the third consecutive month-to-month drop of sales, and the lowest tally of the year, according to a new report from Home Builders Research, a Las Vegas based company.
Andrew Smith, president of Home Builders Research, reported that builders’ base asking prices keeps rising throughout Southern Nevada, albeit somewhat slower and less frequently lately for some developers.
Still, overall, median new-home closing prices have climbed every month this year, reaching a record high of $411,418 in June, up 8.6 percent from a year earlier.
Many people continue to wonder if the recent slowdown in builders’ sales activity, locally and nationally, is a “worrisome trend” or simply a coming-back-down-to-Earth situation, Smith wrote in the report. “We tend to lean toward the latter,” he added.
The buying frenzy is fueled by low borrowing costs and more out-of-state buyers than usual. The Las Vegas’ housing market has seen record-high prices and brisk sales for months. On the resale side, house hunters have flooded properties with offers and routinely paid over the asking price, while homebuilders have regularly raised prices, put buyers on waiting lists and taken bids for lots.
Locally, sales of previously owned houses faltered a bit during the normally busy spring buying season before rebounding in June.
U.S. builders sold houses last month at the lowest rate in more than a year, according to the National Association of Home Builders.
Robert Dietz, the association’s chief economist, said that “sales have trended lower as construction costs have increased,” adding builders have tried to manage supply delays and “cost challenges” and, in many regions, dealt with shortages of lots and labor.
Smith stated, “Locally, some builders have decided to hold back lots for sale to better meet delivery goals and avoid being hit too hard by increases in material prices that seem to be inevitable between the time the sales contract is signed and when the home can actually begin to be built.”
Still, builders reported 7,348 net sales in Southern Nevada through the first half of the year, up 46 percent from the same stretch in 2020, according to Smith, a period last year that included drops in home sales after the pandemic sparked widespread business closures and other chaos.
Builders also closed 5,825 home sales this year through June, up 22 percent from the same period last year, and pulled 7,792 new-home permits through mid-2021, up 61 percent year over year, indicating a sharp increase in construction plans.
Overall, the market remains hot, “though perhaps not as hot as it has been over the previous nine months,” Smith wrote.
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