A California-based homebuilder saw opportunity in the Great Recession using the down economy in Las Vegas as a chance to enter the market.
The collapse during the past four years has knocked several builders out of business, kept others on the sidelines and prompted some to leave town.
Even the Pulte Group announced Wednesday it has cut back its staff in Las Vegas and consolidated its operations within its Southern California division.
Shea has partnered with a Texas investment group in overseeing the completion of Ardiente, an age-restricted community of 788 planned units in North Las Vegas that is one-third built.
Centex Homes opened the community in 2005 but later sold it to an investment group. During the past three months, the community was ranked No. 9 in sales in Southern Nevada, the builder said.
Shea is counting on the opening of the $650 million Southern Nevada Veterans Affairs Hospital in 2012—less than two miles away from Ardiente and conveniently close to Nellis Air Force Base—to attract buyers.
About two-thirds of the 38 homes sold since Shea models opened a year ago have been purchased by veterans and retired military who like the accessible distance to Nellis and the veterans hospital, said Ryan Smith, Ardiente’s sales manager.
Shea focuses on move-up buyers and adult communities rather than the entry-level communities like KB Home and D.R. Horton.
Smith said Las Vegas is ideal for Shea for active adult buyers because the demographics of the market point to it aging and attracting more retirees.
“You have people coming from California, and we have strong brand awareness with them,” Smith said.
Dennis Smith, the president of Home Builders Research, said Shea’s decision to enter the market was the correct strategy because the cost of land has fallen sharply with the demise of the housing market.
In 2006, more than 35,000 home were built in Las Vegas; that fell to fewer than 20,000 in 2007 and has barely surpassed 5,000 sales in 2009 and 2010. Las Vegas is on pace for fewer than 4,000 sales in 2011.
Las Vegas has 19,000 finished and partially finished lots controlled by builders, developers and banks, he said.
Builders that have pulled out of Las Vegas are Tousa Homes and Kimball Hill Homes, which went into bankruptcy, Smith said. Standard Pacific has wound down its operations in Las Vegas and Centex was bought by Pulte Homes.
The Michigan-based Pulte Group, which includes Pulte Homes and Del Webb, announced the Las Vegas operations will be run by Chris Haines, the Southern California president who previously worked in Las Vegas. The Las Vegas office will remain in place with fewer staff, said Pulte spokeswoman Jacque Petroulakis.
Las Vegas Division President Scott Wright is leaving Las Vegas and taking another position in Pulte, Petroulakis said.
Through the first four months of the year, Smith said D.R. Horton has pulled the most building permits in Las Vegas with 182. That is followed by KB Home with 157 and Lennar with 133.
The others are Pulte/Del Webb, 84; Ryland, 78; Harmony Homes, 72; Dunhill Homes, 69; Pardee, 67; American West, 61; and Richmond American, 40.