weather icon Clear

Housing market seeing ‘real impact’ of high demand, low supply

Updated October 26, 2021 - 9:12 am

Homebuilders saw mixed results in Southern Nevada last month, though compared with a year ago, buyers have purchased far more houses in 2021 and paid higher prices for them.

Builders notched 977 net sales — newly signed contracts minus cancellations — in September, up 12 percent from August but down 5 percent year over year, according to a report Monday from Las Vegas-based Home Builders Research.

A total of 149 new-home sales were canceled last month, the most since October 2020, though buyer traffic for builders’ projects was up in September compared with the prior two months, the firm reported.

Overall, homebuilders closed 9,011 sales in Southern Nevada this year through September, up 17 percent from the same stretch in 2020, and pulled 11,275 new-home permits, up 33 percent, indicating a big jump in construction plans.

Moreover, buyers paid a median closing price of $421,790 last month for newly built homes, up 13.9 percent from a year earlier.

For single-family houses — builders’ top-selling product by far in Southern Nevada — buyers paid a record-high median of $450,114 last month, up 15.4 percent year over year.

After a buyer signs a sales contract, it can take several months before the home is finished and the purchase can close.

Las Vegas’ housing market has accelerated over the past year with rapid sales and record prices, fueled largely by rock-bottom mortgage rates that have let buyers stretch their budgets. Southern Nevada also has seen more out-of-state buyers than usual during the pandemic, real estate pros have said, as people sought more space amid widespread work-from-home arrangements.

Locally, builders have put buyers on waiting lists, taken bids for lots and regularly raised prices amid fierce demand, supply shortages and higher costs of their own.

Home Builders Research President Andrew Smith, pointing to the jumps in new-home prices, wrote in Monday’s report that the market is “now starting to see the real impact” of high demand and low supply.

According to Smith, builders’ base asking prices “continue to rise,” and projects with an average base price between $400,000 and $750,000 have accounted for more than 50 percent of net new-home sales this year.

By comparison, communities with average prices below $300,000 have made up just over 3 percent of sales this year, he added.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.

Don't miss the big stories. Like us on Facebook.
Housing boom not ending in 2022, expert says

Frank Nothaft, chief economist with housing tracker CoreLogic, spoke with the Review-Journal about the U.S. market’s trajectory during the pandemic and what might happen next.