BluefoxToday blog : Las Vegas housing projects in outlying areas slowing down

Las Vegas housing projects in outlying areas slowing down

A few years ago when the real estate boom was happily chugging along home prices in town were breaking records month after month. The predictable result was that many home buyers were beginning to be priced out. Smaller, established communities like Mesquite and Pahrump where land cost a lot less could offer affordable housing and they began growing steadily.

Besides them, developers were also drawing plans for new master-planned communities in the outlying areas, like Coyote Springs straight north from Las Vegas and White Hills in northern Arizona. Again, the key attraction with them was that housing out there would be reasonable. The city was still growing at a healthy clip, so it was entirely viable that any new development out in the distant valleys would draw an enthusiastic response.

But then the real estate market tanked and with it the mortgage segment. Demand especially for new homes in Southern Nevada has slowed dramatically and that has put many out-of-town projects on hold. Resale prices in the valley have adjusted downward remarkably, making homes here more affordable again. Specifically the lower end of the scale is now well within reach even for the first-time buyer. Because new homes in the city are now moving sluggishly, demand out in the outlying areas would be even weaker.

That must make developers with huge land holdings in the suburbs wonder when the time is ripe to proceed with building. Their original low price structure was based on Las Vegas housing being largely unaffordable, but now that the situation has amazingly turned around, that scenario no longer applies. They may have a long wait ahead of them before the real estate market here again supports their plans. People probably don't want to drive 50 miles one way with today's gas prices if they can buy a home in Vegas proper for the same money than out there in the wide open country.

For the short term at least, it seems that demand for resale homes in Las Vegas keeps increasing as prices remain weak and eventually that will start pushing values back up. There are only so many homes available within the city, so that is bound to happen as multiple offers keep pouring in. Once they go high enough sometime in the future, building in the distant hills becomes feasible again.


Provided by: 

Esko Kiuru
Mortgage, real estate and apartment industry analyst - syndicated mortgage, housing and property management blog
My cell: 702-499-1006

Comment balloon 0 commentsEsko Kiuru • September 04 2008 11:03PM