Builders add projects as luxury real estate surges

More than five years after it started lot closings in 2016, the Summit has sold all but one of its 150 custom lots, of which some went for in excess of $10 million. Last summer, a wealthy buyer with ties to California paid a record $36 million for 4.47 acres to build an estate in the Summit Club.

Sources in the Las Vegas homebuilding and real estate industry told Real Estate Millions that the Summit Club, a project of the Discovery Land Corp. in partnership with The Howard Hughes Corp, the developer of Summerlin, is in the process of trying to acquire more land for dozens more custom lots. Sources said the land is adjacent to the south end of the Summit Club between it and Mesa Ridge in The Ridges.

When asked about that prospect this week, a Discovery Land spokeswoman said they have nothing to share on that at this time. The Howard Hughes Corp. declined to comment on the matter, as well.

The Summit announced last summer it would construct 20 additional luxury condominiums after 29 of its 31 ultra-luxury multimillion-dollar units sold out. It also had sold the majority of its 64 pre-designed developer homes, referred to as club residences, bungalows and villas that range in price from $7.5 million to $12 million. Some 27 of those were left as of Jan. 20.

Luxury Realtor Ivan Sher, Berkshire Hathaway HomeServices, Nevada Properties, said it says a lot that The Summit is looking to add more land, and that he has clients looking to acquire custom lots there to build homes.

“It’s a phenomenal sign of the strength of the luxury market in Las Vegas,” Sher said. “The most expensive residential land in the city has sold out and now they’re having to acquire more land. That’s remarkable.”

Blue Heron founder Tyler Jones, who’s built custom homes in The Summit called it a great move if it transpires.

“Clearly they have more demand,” Jones said. “They’re sold out. I don’t think anyone thought they would sell out at the prices they did as quickly as they did. It’s a no-brainer for The Summit if they are able to put that piece together. And, we’re excited about designing and building a bunch of those homes in the new section as well.”

The Summit news comes on the heels of the Las Vegas Review-Journal reporting earlier this month that the Howard Hughes Corp. sold 216.4 acres off Town Center Drive and Tropicana Avenue for $135 million to Pulte Homes and Toll Brothers. The site is between The Summit Club and Mesa Ridge in The Ridges and is expected to be a luxury guard-gated development of 561 single-family homes.

Pulte and Toll Brothers are the top two luxury builders in Las Vegas, and Summerlin is the leading area for luxury building. The builders haven’t disclosed what they’re building as of yet, and what their timetable is for the project.

“Given the way the market is right now, I think it should do very well,” said Andrew Smith, president of Las Vegas-based Home Builders Research. “It is a highly desirable area. Ninety-nine percent of people can’t live in The Summit, and for the next step, two or three down, it’s a nice area next to that.”

The sale of land for luxury homes is not a surprise given the latest numbers for luxury sales in the existing home and new-home market. That market is not slowing down.

Real Estate Millions reported the luxury housing market, as sold on the Multiple Listing Service by Las Vegas Realtors, exploded in 2021 by more than doubling the record- breaking sales of 2020 — including the category of $4 million and above — as California and other out-of-state residents flocked to Southern Nevada during the COVID-19 pandemic. There were 1,686 sales of $1 million or more, and 101 of $4 million and higher, doubling from 2020.

The new-home market was strong but builders haven’t been able to keep up with the demand because of limited land availability, supply chain issues and a lack of labor. There were 432 sales of new homes of $1 million and above, a 38 percent gain over the 313 in 2020. That total was 26.7 percent higher than the 247 in 2019. Some of that gain is the median price of new homes up 22.9 percent over the past year, but it’s also a reflection from builders trying to keep up with strong demand in that price segment. Even speculative homebuilding is picking up after buyers gobbled up the supply, Smith added.

“The sales numbers are a good sign for builders because that buyer is out there,” Smith said.

Sher said there’s strong demand for new luxury homes in part because there’s a limited supply on the resale market. That’s creating opportunities for builders who have their own challenges, he said.

“MacDonald Highlands is running out of land,” Sher said. “Ascaya still has land, but a lot of the bigger communities are sold out. I have a feeling the (Toll and Pulte project) will be a notch up from the Mesas. Everything they’re doing is selling at a record pace. There’s not enough inventory for people to buy. I imagine the price will be a notch up and so will the product.”

MacDonald Highlands has 20 developer lots for sale and will release its final 30 custom lots on Feb. 1. Also, in MacDonald Highlands, SkyVu, which was unveiled last fall, continues to take reservations for its 102 home sites. So far, 37 have been reserved for the project of Christopher Homes, which will be converting those to contracts in February or March

The single-story and two-story homes will have prices that start at $1.5 million to more than $2 million. Christopher’s Vu luxury town home collection has only one of 110 units left. Vu Estates has sold out of its 17 homes and Vu Pointe has eight left of 74 that were released.

Erika Geiser, Christopher Homes’ vice president of marketing, said sales remain strong with buyers from California despite a little slowdown in traffic in recent weeks due to the Omicron variant. Some 40 percent of the buyers are from California, and 25 percent from other parts of the country, she said.

“We’re getting an influx of people from California who understand the value they’re getting in Las Vegas and lower taxes,” Geiser said. “It’s the same narrative it’s been for years. We see a strong market this year and one going into next year.”

Geiser said the new-home demand is aided because the homes in excess of $1 million on the resale market are older and less desirable because buyers don’t want to remodel them.

“They want a newer floor plan, nicer exterior, and they want new technology with energy-efficient features,” Geiser said. “They want storefront glass and large floor-to-ceiling windows and a more open concept floor plan. It’s harder to put that in an older home.”

In Ascaya, a Henderson hillside development, Mike Leipart, managing partner at The Agency Development Group, which leads sales and marketing for Ascaya, said the development ended 2021 with $77.7 million in closed transactions and total sales volume of $94.7 million, In 2020, sales were valued at $28.7 million. A total of 53 custom lots were sold in 2021, compared to a total of 46 home sites sold between 2014 and 2020,

Leipart said most of the buyers were from Southern California, but there were buyers from Las Vegas, as well.

Ascaya has unveiled newly built homes from its Accelerated New Homes Design-Build program, a way to expedite bringing new homes to market.

Las Vegas isn’t done with luxury building. There’s plenty of additional luxury developments in the works as well.

CSR Development is promoting The Reserve at Red Rock Canyon adjacent to Spring Mountain Ranch. It offers 19 estates that range in size from 2 to 4 acres each with prices that start at $5 million. Blue Heron is constructing a show home at the site.

Blue Heron is the builder that had the highest-priced new home that sold on the market in 2021 at $25 million. That same home was also the highest sold on the MLS. The buyer of the three-story home that measures 15,000 square feet was Anthony Hsieh, the billionaire founder of LoanDepot.

Blue Heron has three active-selling luxury communities. There’s Caliza at Lake Las Vegas on an elevated bluff above the water where it has nine home sites available starting at $1.99 million.

Dragon Rock in MacDonald Highlands, where the model home was built in 2021 and has 21 home sites available that start at $1.85 million. Obsidian in the Black Mountain foothills is a community of 33 homes that has three sites left, starting at $2.32 million.

“There’s strong demand that’s at an all-time high,” Jones said. “There’s a limited supply of high-quality luxury homes out there. And we have multiple new communities coming online in the next quarter or so. The demand is strong for the foreseeable future.”

Those new communities will be announced in the next month or two, Jones said.

Last fall, Neo, a luxury development in Henderson undertaken by Philippe Ziade, which owns Growth Luxury Homes, was unveiled under Livv. The 60-acre project adjacent to MacDonald Highlands has 84 home sites for a hillside guard-gated community where prices will start at $2.3 million and escalate to about $4 million for the semi-custom homes. There’s a similar luxury project planned for the southwest valley. About a dozen reservations have been taken and another six in the pipeline without a big marketing campaign yet.

Steve Escalante, vice president of business development with Growth Holdings who has a similar title with Livv, said the push for luxury development in Las Vegas is a reflection of the city’s transformation in attracting wealthy buyers.

“Vegas in the past had the stigma that it was only casinos and gaming,” Escalante said. “Now, with the addition of professional sports teams, we’re starting to see the perception of Las Vegas change. We always said once the perception of Las Vegas changes, you’re going to start to see the market change and pricing go up. Now, people are moving to Las Vegas and see it as a place to live, whereas before they didn’t think of Las Vegas that way.”

In the luxury segment, it’s the same, Escalante said. People came here for the adult playground and didn’t think of living here.

“Now, a lot of the high net-worth people because it’s conducive with (no state income tax in Nevada) understand Vegas is an amazing city from a lifestyle standpoint,” Escalante said. “It’s definitely within the U.S. market, the top three best places to live in the country. We have all the best restaurants, shopping and shows and with some of the best golf in the country. We’re close and accessible to nature with Lake Mead and Red Rock. We’re close to California and Utah and have an airport with direct access to anywhere in the world. That’s where the luxury market is starting to embrace Las Vegas, not just a place to come and spend money and gamble.”

Escalante said the high-end homes being built in Las Vegas are drawing clients not only from California but the Pacific Northwest, Midwest and East Coast.

“The East Coast would migrate to Florida, but they are now looking at Vegas as a destination to settle,” Escalante said.

Escalante said the developers are pursuing these luxury projects because they’re trying to catch up with the need for products.

“The offerings weren’t there before,” Escalante said. “The high-net worth would overlook Vegas because there wasn’t enough high-end product on the market. Now, you have so many developers understanding that. Besides us, there’s a lot of great development companies and custom builders that are now providing products with a huge demand from other markets looking for luxury homes. That’s driving developers. You see the big developers buying land tracts putting luxury products because there’s a huge demand. We’re one of the best undervalued markets on the West Coast. A $10 million luxury home here is $30 million to $40 million in San Diego or Los Angeles. We’re a fraction of the same exact product and draw a lot of attention from prospective buyers.”

There’s luxury even on the entry-level scale. Tri Pointe Homes opened Overlook at the Redpoint village in late October with homes starting in the upper $900,000s and surpassing $1 million. The first batch of the single-story homes will be completed in April. There are 93 home sites.

To meet demand from customers, Richmond American Homes will be releasing more of its luxury series homes in 2022 in the northwest and southwest valley. There will be 40 lots in the northwest with homes starting at $800,000 and closing at more than $1 million for both. There will be 20 luxury home sites in the southwest.

Toll Brothers leads among luxury homes sold in 2021 with 131, according to Home Builders Research. They were followed by Pulte with 62. Tri Pointe Homes finished third with 56 sales.

The numbers drop off from there. Richmond American had 37, followed by Discovery Land at the Summit Club with 25. They were followed by Christopher Homes, 19; Blue Heron, 18; Lennar, 18; Pinnacle Homes, 15; Taylor Morrison, 10; and D.R. Horton, 6.

Summerlin leads the valley in luxury new home sales totaling 267 in 2021. That was followed by 29 in Lake Las Vegas, 23 in MacDonald Highlands, and six in Southern Highlands.

Coronado Ranch and Inspirada had four luxury home sales. Ascaya, which traditionally has sold only lots, has one sale.

The sales numbers don’t include custom lots of buyers like those in the Summit Club who hire builders to construct it for them.

Following the $25 million sale in MacDonald Highlands, the No. 2 new-home sale of 2021 sold directly by a builder was for $8.8 million inside Southern Highlands Country Club. The home built by Unique Custom Homes measures more than 12,000 square feet with six bedrooms. The buyer was the BDJ Family Partnership.

The No. 3 sale was for $7.75 million and built by the Atia Group of Beverly Hills. It measures more than 18,000 square feet with nine bedrooms. The buyer was Bill Piercey, the owner of Piercey Automotive Group in Southern California.

New homes built in The Summit Club and other luxury home communities can be worth more, but since they are built by the owners, they don’t count in this highest-price list.