New houses selling for record highs in Las Vegas as sales totals fall

Las Vegas homebuilders’ sales activity slid further last month as house hunters again paid record-high prices for new construction.

Housing developers reported 935 net sales — newly signed sales contracts minus cancellations — in Southern Nevada in June, marking the third consecutive month-to-month drop and the lowest tally of the year, according to a new report from Las Vegas-based Home Builders Research.

Builders’ base asking prices keep rising throughout Southern Nevada, albeit somewhat slower and less frequently lately for some developers, the firm’s president, Andrew Smith, reported.

Still, overall, median new-home closing prices have climbed every month this year, reaching a record high of $411,418 in June, up 8.6 percent from a year earlier.

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

Many people continue to wonder if the recent slowdown in builders’ sales activity, locally and nationally, is a “worrisome trend” or simply a coming-back-down-to-Earth situation, Smith wrote in the report.

“We tend to lean toward the latter,” he added.

Fueled by low borrowing costs and more out-of-state buyers than usual, Las Vegas’ housing market has seen record-high prices and rapid sales for months. On the resale side, house hunters have flooded properties with offers and routinely paid over the asking price, while homebuilders have regularly raised prices, put buyers on waiting lists and taken bids for lots.

Locally, sales of previously owned houses dropped for two months during the normally busy spring buying season before rebounding in June.

As seen in Smith’s report, however, homebuilders’ sales totals kept sliding last month as prices kept escalating and buyer traffic to new subdivisions “steadily decreased throughout” the second quarter.

Nationally, the pace of builders’ sales of single-family houses dropped 6.6 percent last month from May and 19.4 percent from June of last year, federal officials reported Monday.

U.S. builders sold houses last month at the lowest rate in more than a year, according to the National Association of Home Builders.

Robert Dietz, the association’s chief economist, said in a news release that “sales have trended lower as construction costs have increased,” adding builders have tried to manage supply delays and “cost challenges” and, in many regions, dealt with shortages of lots and labor.

Locally, some builders have decided to hold back lots for sale to better meet delivery goals and “avoid being hit too hard by increases in material prices that seem to be inevitable between the time the sales contract is signed and when the home can actually begin to be built,” Smith wrote.

Still, builders reported 7,348 net sales in Southern Nevada through the first half of the year, up 46 percent from the same stretch in 2020, according to Smith, a period last year that included drops in home sales after the pandemic sparked widespread business closures and other chaos.

Builders also closed 5,825 home sales this year through June, up 22 percent from the same period last year, and pulled 7,792 new-home permits through mid-2021, up 61 percent year over year, indicating a sharp increase in construction plans.

Overall, the market remains hot, “though perhaps not as hot as it has been over the previous nine months,” Smith wrote.

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