Posted in Las Vegas Market | Posted on 08-24-2015 | Written by Metrostudy News
- Quarterly starts are 22% higher compared to 2Q14 as builders remain confident in the market.
- Production under $200K represents only 4% of all housing starts for the quarter compared to 2Q14 when 13% were under $200K.
- Our median “offer to build” price for all Single Family Detached active projects is $307K – 9.6% higher than one year ago.
AUGUST 2015 – Metrostudy’s 2Q15 survey of the Las Vegas housing market shows that annual single-family new home closings were 5,912, down 3% from 2Q14. Quarterly closings were 23% higher however. Quarterly starts are 22% higher compared to 2Q14 as builders remain confident in the market. The annual start pace increased by 13% YoY. All of these numbers are indicative of both increased demand, low levels of finished inventory, and very tight lot supply.
“Pricing in the resale market has improved rapidly,” said Greg Gross, Director of Metrostudy’s Las Vegas Region. “Average sales price for Single Family Homes increased 8.1% this year with median sales price also increasing 10.1%. Compared to June 2014, the average asking price of for-sale homes is 14% higher at $352k. Production under $200K represents only 4% of all housing starts for the quarter compared to 2Q14 when 13% where under $200K. The market is beginning to see more slightly affordable attached product entering the market.
Our median “offer to build” price for all SFD active projects is $307K; 9.6% higher than one year ago. Total Finished Vacant housing inventory has decreased 3% this year. Builders needed to replenish their vacant inventory to satisfy demand, yet these inventories are being effectively managed. Single Family product – which represents 74% of all inventory – has only 1.7 months of Finished Vacant home supply at current pace.
“There is less than 19 months of supply of Attached finished and vacant product,” said Gross. “However annual closings of condos have improved dramatically during the past 2 years which lowered the condo supply considerably. Entry and mid-level product will be opportunistic as the market continues to improve. The attached home market has seen the median sales price increase more than 5% this year.”
Total finished lot supply has fallen considerably over the past five years and lot deliveries have remained slow. With only 8,451 Finished SFD lots today, that’s only 15 months of supply, even with a 21% increase in lot deliveries since 2Q14.
The net absorption of lots highlights the dearth of deliveries as we continue to deplete the supply even as 8,131 new lots were added during the past four quarters, we started 6,686 new homes. There are now 15,145 lots in development compared to 2Q14 when 14,089 lots under development, and immediate production capacity is still healthy for the next year. The majority of the new lots in development are in Summerlin, Inspirada, Cadence and the general Southwest Valley. It is worth noting that this number of finished lot supply remains near record low levels, lowest since Metrostudy began counting in 2002.
“One of the most challenging issues over the past year was the availability of lots and the impact on land prices,” said Gross. “Over the course of 2014, the total number of lots in development declined but that reversed during the first half of 2015 as projects are seeing much more rapid development. Builder confidence in the market remains strong as the market is at 2008 levels. However affordability may be reaching a point which may begin to force first time buyers out of the market for new homes especially now that investors are realizing the opportunity in Southern Nevada.”
For information contact:
Greg Gross – 916.231.9370
Metrostudy is the leading provider of primary and secondary market information to the housing and related industries nationwide. Metrostudy provides research, data, analytics and consulting services to help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day. For more information, visit www.metrostudy.com
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