The fourth quarter of 2019 got off to a great start for Las Vegas area homebuilders and again continued the consistency that has shown itself throughout this year. While buyer traffic had a modest increase of four percent in October 2019 year-to-year according to our Weekly Traffic & Sales Watch, new home net sales (new contracts minus cancellations) registered a 34 percent improvement over October 2018 (932 vs. 695). That is the highest October total we have reported since 2006 (1,634).
Based on a recent article from builder-online.com, it seems that Southern Nevada was not alone with its impressive October showing. According to the article, the Mortgage Bankers Association Builder Application Survey data showed that mortgage applications for new home purchases for the entire United States increased 31.5 percent from October 2018 and nine percent month-to-month from September 2019.
We counted 871 total new home closings in October, a 9.4 percent increase from October 2018. This was the fourth time this year we have reported a year-to-year increase in new home closings and the overall total for 2019 (8,658) sits just 1.3 percent behind 2018 through October. Based on historical averages going back to 1989, it looks like builders will be extremely close to the 2018 total of 10,673 new home closings by the end of the year. That being said, as we have repeatedly shown in these pages, 2019 has been far from “normal” in many ways so it will be interesting to observe how things play out over the final two months of the year.
The median new home closing price in October 2019 for all product types was $392,054, a year-to-year increase of 0.5 percent. This slight increase comes after three straight months of year-to-year declines in the median price for all product types. This is the second highest reported figure for a single month going back to 1990 behind the $396,994 registered in December 2018.
We reported ten new communities opening for sales in October in our Weekly Traffic & Sales Watch which were spread across the entire valley. As of this writing, the most successful has been Edgewood from Lennar, which has reported 13 net sales through November 24th. It is located in the east sub-market area near Vegas Valley Drive and Hollywood Boulevard and has an average base asking price of $291,657. On the other end of the price spectrum, Toll Brothers opened Lusitano Ranch in the 89131 Zip Code in the northwest. The project has 36 half-acre lots with four available plans with an average base asking price of $746,995. They have yet to report any sales, though traffic numbers have been relatively strong, averaging 22 per week.
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