Although the existing home market has been rebounding in recent months with sales running ahead of last year’s pace, the new-home market remains in the doldrums.

One national builder has called the third quarter “one of the most difficult in homebuilding history.”

When Congress and the Bush administration enacted a housing stimulus bill in July, many expected the bill’s main provision, a temporary $7,500 tax credit for first-time homebuyers, would help the industry.

That hasn’t been the case, especially in Las Vegas where new-home sales in July (731) and August (792) were the weakest of the year. September is likely to be even worse because of the meltdown on Wall Street and tight lending standards hampering the ability of many potential buyers to obtain mortgages.

Builders are facing continued competition from foreclosed homes, which is bringing down the price of existing homes to $200,000. New-home prices fell below $260,000 in April, but have steadied since, landing at $253,000 at the end of August. That gap between new and existing homes had been as little as $28,000 in April.

Through the end of August, new-home closings were down 49 percent compared with the first eight months of 2007. In contrast, existing home closings were up 5 percent, according to SalesTraq.

“All you have to do is look at the numbers, and you can see the (stimulus) has not helped the housing market,” said Steve Bottfeld, executive vice president of Marketing Solutions. “It didn’t have a huge impact.”

Without the Wall Street meltdown, Bottfeld says it could have made a difference, but the dynamics of the market have changed.

“The tax credit can’t get you a mortgage, and that is the key issue on whether you can buy a home,” Bottfeld says.

Bottfeld, one of the biggest cheerleaders for the housing market, says he remains concerned about where the market is heading because he thought prices would start rising by the fourth quarter and first quarter of 2009.

A Wall Street bailout package will help the housing market because it should give buyers access to loans. It will slow down foreclosures because owners will be able to refinance, Bottfeld says. More important, it begins to restore confidence because people will realize prices are bottoming out, he says.

“Until prices go up, we are still going to be in a recession,” Bottfeld says.

What the bailout won’t do, however, is address the long-term concerns of what triggered the need for the bailout in the first place, Bottfeld says. Housing needs to go back to being treated as shelter rather than a commodity, he says.

“This bill is not doing that,” Bottfeld says. “I love investors to death. They were 20 percent of the Las Vegas market up through the boom, but speculators are deadly because they don’t give a damn about the neighborhood. All they care about is turning a profit fast.”

Las Vegas construction permits

The value of building permits issued by Las Vegas has dropped 27 percent through the first three quarters of 2008 compared with the same period in 2007.

Through Sept. 30, $588 million in permits were issued, down from $809 million a year earlier. The biggest decline has been in new-home permits, whose numbers declined from 1,941 last year to 939 this year. The value dropped from $230 million to $103 million. New-commercial construction fell sharply from $344 million to $120 million. The category showing the most improvement was the construction of apartment complexes with $134 million in permits issued compared with none a year ago.

In September, the value of permits fell 20 percent to $34 million, down from $43 million a year ago. There were $11.3 million in new-home permits compared with $10.8 million a year ago and new-commercial construction was $9.2 million, up from $7.6 million a year ago. The category that recorded a decline was duplex construction, which fell from $9.2 million a year ago to zero.

In other real estate news:

# Las Vegas had one of the biggest declines when it comes to metropolitan areas creating and sustaining jobs and creating economic growth, according to the Milken Institute. Las Vegas ranked 75 in 2008 after a ranking of nine in 2007, a drop of 66 spots. Reno was ranked 133, a decline of 107 positions from a year ago. The Utah cities of Provo and Salt Lake City were ranked first and third, respectively.

# Gemstone Development announced that Camco Pacific Construction has been hired to complete the first phase of Manhattan West. Camco replaces APCO Construction. Gemstone Chief Executive Alex Edelstein says the contractor was replaced because the project was not being kept on schedule or meeting other expectations. APCO officials did not return phone calls to comment. Manhattan West is on track to complete mid-rise residential buildings by the end of the year and a nine-story tower by January, Edelstein says. It is a $350 million mixed-use development near Interstate 215 and Russell Road.

# Prudential Americana Group, a Las Vegas real estate brokerage, has formed a partnership with Shelter Mortgage to provide residential mortgages. Shelter is a subsidiary of Guaranty Bank, a family-owned bank with branches in Wisconsin, Illinois, Michigan, Minnesota and Georgia. This is the company’s first partnership in Las Vegas, and it has more than 40 nationwide. “At a time when many other real estate lenders are shutting down altogether, it was important for us to work with a reputable mortgage provider,” said Mark Stark, chief executive of Prudential Americana Group.

# Applied Analysis reported the number of resale homes on the Multiple Listing Service jumped by more than 359 units and was the largest weekly increase since May 2007. The number of vacant properties has also increased by nearly 400 during the past week. The number of owner-occupied homes declined by 50 to 7,568 and represents 34 percent of all homes listed for sale, the firm reports. Tenant-occupied units represent 9.5 percent of the total while vacant properties account for 57 percent. The inventory is down nearly 6,700 units or 23 percent from 2007.

Credits: In Business Las Vegas

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Pardee Homes was among the first home builders to open within the master-planned Mountain’s Edge community with its Montelano neighborhood in late 2004. Today Pardee continues as a trailblazer at Mountain’s Edge, where the builder recently opened its sixth new home neighborhood.

“Pardee Homes has been building in Southern Nevada for nearly 60 years, and we’re used to being trailblazers, as is evidenced by our Eldorado community in North Las Vegas and our projects in Mountain’s Edge,” said Pardee Homes’ Regional Sales Director Rob Tuvell.

Current Pardee neighborhoods in Mountain’s Edge include Serrano, Rosetta and La Puerta, where just a few homes remain available.

Serrano and Rosetta are both EnergySmart neighborhoods, which means that the homes are enhanced with money-saving and energy-efficient features, such as spectrally selective glass to keep the homes cooler in the summer and warmer in the winter, and ceiling insulation and sealed ducts for improved air quality.

In addition, each EnergySmart home is independently certified to assure that it exceeds energy code requirements.

Serrano’s three floor plans include one single-story design and two two-story plans that range from about 1,850 to 2,682 square feet with up to six bedrooms. Home sites average 4,675 square feet and prices start from $234,950.

The four two-story plans at Rosetta range from 1,444 square feet to 1,881 square feet with prices starting at $214,950.

Families in Mountain’s Edge have access to community parks, play areas, baseball fields, sports fields, outdoor amphitheater and picnic areas, according to Tuvell.

To reach Serrano and Rosetta at Mountain’s Edge, take Blue Diamond Road west to Buffalo Drive and turn left into the Mountain’s Edge community. Proceed south on Buffalo to Cactus Avenue and turn left and follow the signs to the neighborhoods. For more information visit pardeehomes.com.

Pardee Homes’ sales offices and model complexes are open from 10 a.m. to 6 p.m. daily, except Monday when they open at 11 a.m.

One of the West’s largest and longest-established home builders, Pardee has built homes for more than 35,000 families in Southern Nevada since 1952.

Credits: Review Journal

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One of Henderson’s largest private employers has sold land adjacent to one of its big properties — the Fiesta Henderson — to a developer who wants to build apartments for casino employees who would then be able to walk to work.

But there’s a hitch: The builder wants permission to build 50 percent more units per acre than is allowed by zoning, in exchange for allowing the casino workers first dibs in signing up for apartments. Such a trade-off has no precedent in Henderson.

The developer, Trammell Crow, has made no offer to rent the apartments at less than market prices in exchange for the increased density.

On the other hand, the apartments would reduce traffic congestion and save the casino workers the expense of commuting to work, proponents say.

The Henderson Planning Commission rejected the proposal, which will go to the City Council for consideration.

The apartments would be built on a 10.5-acre parcel at Fiesta Henderson Drive and Lake Mead Parkway.

Station Casinos, which owns the Fiesta Henderson, is selling the land, which is across the street from the casino, to Trammell Crow.

The city Planning Commission has approved 24 units per acre on the site, rejecting the developer’s request that it be allowed to build 38 units per acre.

Planning commissioners said there was no proof Fiesta Henderson employees will have first rights to the apartments, as well as other incentives to live across the street from work.

Those incentives, the commission implied, would qualify the project as “workforce housing” and allow for increased density.

The item has not been placed on a City Council agenda.

The city has never entered an agreement that binds a housing proposal to a specific business, said Skeet Fitzgerald, the city’s neighborhood services director. Proving that the apartment complex — to be known as the Alexan Fiesta — caters to one company may be difficult.

Jeff Allen, managing director of Trammell Crow Residential Southwest, said such “workforce housing” would be especially desirable to people working in the area.

The Alexan apartments would also be within walking distance of Lake Mead Crossing, a new shopping center across Lake Mead Parkway from the casino in a city redevelopment area.

Allen said the purpose of workforce housing is not to offer subsidized or rent-controlled housing, but to provide housing near work for people who can’t afford to buy homes.

Rental rates for the apartments have not been set. Allen said it would be at least a year before the units were ready for living, after approval.

He estimated 1,000-square-foot apartments would rent for $1,200 a month.

At 38 units per acre there would be about 380 units at the complex in 14 buildings.

Lori Nelson, a spokeswoman for Station Casinos, said the company is not trying to get employees discounted rent, only first crack at the apartments.

“We’re just looking for an alternative for our employees,” Nelson said.

Fiesta Henderson has more than 800 employees.

Allen said the plan could be a model for future development. He said increased gas prices and an emphasis on green living could make apartments near workplaces more desirable.

“There was less of a demand as long there was land at a fair price where people could still commute,” he said. “Now with gas at $4 a gallon, to have that proximity to employment really does provide employees a way to save more of their take-home pay.”

More than 40 Fiesta employees appeared at the Planning Commission meeting in support of the proposal.

Credits: Las Vegas Sun

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