Builders in Las Vegas Valley say regulations mean fewer starter homes
You’ve dreamed for years of buying your first home, and now it’s time.
You know exactly what you want.
You see all the new homes sprouting up and believe it’s a given that your starter home is out there.
But there are few guarantees in life, and chances of finding the perfect starter home in Las Vegas and Southern Nevada are growing slimmer.
“Many of the newer city regulations are restricting the smaller lots and pushing for a better streetscape,” said Joe Whatley, co-owner of Liberty Homes and owner of TNM Construction. “Builders used to have some entry-level homes (25-foot-wide product) on a 35-foot-wide lot. Adding the mandated new energy codes, fire sprinkler systems (depending on municipality) and increased construction costs, it is very difficult for many of the builders to provide a detached entry-level home under $200,000. I believe it will continue to be harder for builders to reach the entry-level buyer with a new detached product with these added costs, and we’ll see more attached product come to market.”
The original concept of a newly built starter home outside of the city has changed due to both the end of low-cost land development and the changing preferences of successive generations in the United States. Since the end of the 20th century, more and more new homeowners are seeking different kinds of housing such as a condominiums or older existing home.
A starter home is a house that is usually the first which a person or family can afford to purchase, often using a combination of savings and mortgage financing. In the real estate industry, the term commonly denotes small one- or two-bedroom houses, often older homes but sometimes low-cost new developments. The concept originated in the United States during the post-World War II era when entry-level home ownership was a preferred option for young families and regarded as part of the American Dream.
“Many builders are concerned that newer regulations will continue to price out affordability to the entry-level buyer in Las Vegas,” Whatley said. “Like many other cities, it is getting more and more difficult to provide affordable new housing to the first-time homebuyer. In the past, municipalities were allowing higher-density product to reduce the cost of the home. Since land is a part of the total cost of home ownership, the product was being designed on smaller and smaller lots. Two story product (box on box) added to a product that was more affordable. The problem is, the entire street looks like a row of garage doors with no available parking for visitors and guests.”
One of the more important questions for first-time buyers is how much they are willing to compromise on location. In many large cities, for example, homes closer to town are more expensive than homes in the suburbs. That means buyers have to decide how far out they’re willing to move to get more space.
Most experts agree that if you buy a home, you need to make sure you can live in it for at least five years, and maybe longer. The needs and desires of young singles or couples without children are often different from the needs and desires of families, where schools and space matter more.
PulteGroup, which builds new single-family homes and townhomes throughout the U.S., sees two main types of first-time buyers. These newbie homebuyers want different things in starter homes, says James Zeumer, vice president of corporate communications.
Younger buyers, who might not have children, typically want to be closer to urban areas and are willing to live in attached homes, such as a townhouse community. Families, who are a little older, are more interested in a single-family home with a yard and are willing to move farther into the suburbs to get that, he says.
A National Association of Realtors survey of first-time buyers between July 2013 and June 2014 found that the median age of these buyers was 31 and that the median home size purchased was 1,570 square feet. Of those buyers, 75 percent chose a single-family home, 10 percent chose a townhouse and 10 percent chose a condo or co-op. More than half, 54 percent, were married and 15 percent were unmarried couples. Unmarried women made up 18 percent of first-time buyers, and single men accounted for 11 percent.
More importantly, 75 percent of first-time buyers said they had compromised on their home purchase, most commonly on the size and price.
Contact senior writer John Kelly at Jkelly@reviewjournal.com or 702-383-0206.
