LAS VEGAS HOUSING 1Q18: Market Continues at 2008 Levels – Production Continues to Shift to Higher Price Points
- Quarterly starts are up 13% YoY, while annual new home starts are up 9% from 1Q17 levels
- Annual New Home Starts are at the Highest Levels since 1Q08
- Production of homes under $250k has been nearly eliminated as only 45.3% of new home production is under $350k, compared to 60.5% in 1Q17.
Metrostudy’s 1Q18 survey of the Las Vegas housing market shows that through 1Q18, annual new home starts are up 15% YoY, while annualized new home closings were up 9% more than in 2017. 1Q18 quarterly starts are up 13% compared to 1Q17, as builders remain confident in the market. Closings in the first quarter were 4% more than in 1Q17, all of which can be indicative of both increased demand, low levels of finished inventory, and tight lot & labor supply. Annual new home starts are at the highest level since 1Q08.
“Production of all homes – detached and attached – priced under $250k has been nearly eliminated as base prices have shifted into the $350k-$450k range,” said Greg Gross, Regional Director of Metrostudy’s Las Vegas market. “We continue to see production push into the higher price points as 45.3% of new homes starts in 1Q18 were priced under $350k, compared to 60.5% in 1Q17. Our average base price for all single-family homes is now $455K; up 7% compared to year ago.”
Pricing in the resale market has increased impressively this year. The average sales price for Single Family Homes has reached $331K, an increase of 17%. This is the highest average sale price since 11/2007. The average asking price of for-sale homes is 13% higher, now $476k; again the highest since 2007.
There are now 11,978 lots in development compared to 1Q17 when 10,803 lots under development, the total number of lots in development is 11% greater than last year. The majority of the new lots in development are in Summerlin, Inspirada, Skye Canyon, Cadence and the general Southwest Valley. Expect more activity in North Las Vegas during 2018. It is worth noting that this number of finished lot supply has declined over the past year, which will keep supply relatively tight, at least for the next 12-18 months.
Las Vegas remains an in-migration market, mainly adding population from residents from southern California disillusioned with the rising costs of housing, taxes, and purchasing power. Las Vegas remains an attractive option for its lower housing costs, no state income taxes, and higher purchasing power. The mix of these factors will continue to make Las Vegas an attractive alternative to southern California for the foreseeable future.
Over-supply of lots along with diminished demand has driven down lot prices and land values in the past, but the quickly shrinking supply will force builders to pay more for lots, which will pressure affordability. With that said, Metrostudy is forecasting 10,400 total new home starts in 2018.
Contact: Greg Gross @ 916.231.9370
Metrostudy, a Hanley Wood company, is the leading provider of primary and secondary market information to the housing and related industries nationwide. Established in 1975 in Houston, Metrostudy provides research, data, analytics and consulting services that help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day. www.metrostudy.com
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