Las Vegas homebuilders, after bouncing back strong from the recession, had a lackluster 2014.
Sales volume dropped hard compared with 2013 and prices were volatile. And after ramping up construction plans in the first half of the year, developers pulled back sharply in the second half.
Builders sold 611 new homes in Southern Nevada last month, ending 2014 with a tally of 6,007 sales, down 18 percent from 2013, according to a new report from Home Builders Research.
The median sales price of last month’s closings was $291,785, down 2 percent from a year earlier. Builders also pulled 497 permits, giving 2014 a total of 6,623, down 5 percent from the year before.
Overall, the results “are less than anyone projected,” Home Builders Research President Dennis Smith said in the report.
“The annual totals leave us disappointed but with an ‘it could have been worse’ feeling,” he wrote.
Smith attributed the sliding sales and permits in part to project-processing delays with Clark County.
Builders say it now takes about a year to process final plans with the county, twice as long as with the cities of Las Vegas, Henderson and North Las Vegas.
As Smith sees it, “a couple hundred” more sales could have closed last year if not for the delays, and builders would have pulled nearly 7,000 permits.
But business also dropped because of buyers’ sticker shock and financial woes.
Among other problems: many residents can’t qualify for a mortgage. Banks often won’t lend to someone for several years after a bankruptcy or foreclosure, and after the housing bubble burst, Las Vegas was ground zero for those problems.
“There’s a lot of pent-up demand out there,” Rob McGibney, Las Vegas division president for KB Home, said last summer. “They’re just waiting for these time limits to expire.”
By mid-year, builders were slashing prices, offering buyers more perks and pumping up agents’ sales commissions, in hopes that they’d steer more clients to construction sites.
Still, even if customers qualify for a loan, finding the cash for a down payment is often impossible. Almost 56 percent of Nevada households are in a “persistent state of financial insecurity” with little or no savings, the nonprofit Corporation for Enterprise Development reported last year.
Perhaps in a sign of weak finances and tougher lending requirements, buyers at one point were increasingly canceling purchases.
In October, they backed out of 21 percent of new-home sales contracts in Henderson, up from 12 percent in April, according to Home Builders Research. In North Las Vegas, cancellation rates jumped to 34 percent from 25 percent in that period.
Smith often issues a note of caution in his monthly reports. Here are some remarks — many of which seem like a dose of realism for the it’s-always-sunny crowd — as 2014 progressed (the month is when the report came out):
• February: “2014 started on a ho-hum pace.”
• April: The first-quarter results "are OK but nothing to rave about.”
• May: “The housing market seems to be stuck in neutral.”
• September: “The old two steps forward, one step back scenario seems to be embedded and it is very difficult to get rid of.”
• October: “Sales activity for the next six to eight months will not be too exciting.”
• December: “It is hard to feel warm and fuzzy about the 2015 housing market in Las Vegas.”