With the city’s housing market stumbling in 2008, you might expect local home builders to back off on extras such as ecofriendly construction methods and materials.

Annette Bubak certainly expected a little less interest in a green-building program she oversees.

Bubak is president of Nevada Energy Star Partners, a coalition of home builders, mortgage companies, utilities and construction suppliers dedicated to deploying the U.S. Environmental Protection Agency’s Energy Star program inside local new homes.

Bubak expected 12 local companies to sign up as partners in 2008. Instead, the program netted more than 30 partners by the time its 2008 campaign ended in September.

“Going into the year, we were a little concerned that builders wouldn’t have it in their budget (to contribute funds to the group’s media campaign),” Bubak said. “But we found instead that energy conservation is more important to consumers than it’s ever been, and builders are even more committed to finding progressive ways to increase the energy efficiency of new homes.”

Among Nevada Energy Star Partners’ key accomplishments this year: The group got the Las Vegas High-Rise Condominium Association on board in one of just three pilot programs nationwide to create the first Energy Star criteria for condo towers.

By spring, local builders specializing in mid- and high-rise condo communities will have federal EPA guidelines on insulation, duct work, appliances, lighting fixtures and windows federally certified as energy-saving measures.

The Energy Star designation will help condo developers market more effectively to buyers, Bubak said. The Boca Raton development at Las Vegas Boulevard South and Serene Avenue will serve as the pilot’s guinea pig.

Credit the sustained interest in sustainable design to two factors: Rising energy costs and consumers’ awareness of the carbon footprints their lifestyles leave, said Steve Bottfeld, executive vice president of local real estate research firm Marketing Solutions.

Home buyers want to save money on power bills, and they want to make a smaller impact on the environment. Builders have heeded those demands with Energy Star.

“If a builder adds a core value of energy conservation and climate savvy to their brand, it’s a big help to their future,” Bottfeld said.

“They’re investing in their future. People constantly underestimate builders’ appreciation for what’s going on in consumers’ heads. Builders aren’t stupid. They understand where consumers are going.”

Today, 67 percent of all new homes built in Las Vegas meet Energy Star standards. That’s far and away the top rate in the nation; No. 2 Phoenix lags way behind, in the 35 percent range.

And if Bubak has her way, Nevada Energy Star Partners will make even greater strides in 2009.

The group will partner in the next six months with the EPA on a new initiative called Home Performance with Energy Star.

That program will help owners of existing homes rate their houses for energy efficiency, and it will offer a menu of possibilities for boosting energy conservation in older homes.

In April, Nevada Energy Star Partners won the EPA’s Sustained Excellence honor — the sixth consecutive year the state program received the award. It’s a string of accolades no other Energy Star chapter in the nation has accomplished.

RESALE HOMES — The number of resale homes on the market in Las Vegas jumped by 359 units to 22,317 homes in the week between Sept. 22 and Sept. 29, a report from business consulting firm Applied Analysis shows. That’s the largest weekly gain in resale inventory since the last week of May 2007. The number of listed, vacant properties rose 399 units in the week.

PROPERTY SALES — CB Richard Ellis broker Jeremy Green represented Kirkorian Enterprises in the $1.9 million, 65-month lease of 25,308 square feet of industrial space to Atronic Americas. The property is at 955 Grier Drive. Randy Broadhead, also with CB Richard Ellis, represented Bormann Development Group in the $1.56 million, 66-month lease of 13,155 square feet of office space to The Powell Litigation Group. The space is inside the Nevada Benefits Building at 9525 Hillwood Drive.

Credits: Review Journal

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Nevada housing officials are plotting this week how to spend $72 million in federal funding to resuscitate neighborhoods blighted by foreclosures.

The money might seem but a morsel of help in comparison with the $700 billion bailout package to rescue the financial industry that was rejected by the House of Representatives, but officials say it will help communities stigmatized by vacated homes, dead lawns and murky swimming pools.

The money, from the federal Housing and Urban Development Department, is intended for municipalities to buy and rehabilitate foreclosed homes that can then be sold to low- or moderate-income residents.

The aid is welcomed in Nevada, which leads the nation in the rate of home foreclosures.

“It’s not a program to help individual homeowners, but to help communities facing widespread vacant foreclosed properties,” HUD spokesman Larry Bush said.

Clark County and the cities within it will share $47.6 million, with the balance of the state carving up another $24.3 million. The money flows from the $4 billion Housing and Economic Recovery Act of 2008, passed by Congress two months ago.

In the past four years, two out of five homes in the Las Vegas Valley were purchased with the kind of risky subprime loans that have triggered the housing and credit crises. HUD Las Vegas field director Ken LoBene said that if a city or county were to buy a few homes in a community full of foreclosures, that neighborhood may be viewed more favorably to potential home buyers. So the federal funds could have a dual role: helping low-income residents buy homes and restoring even new neighborhoods that are reeling from empty homes and unkept yards.

“Where’s the tipping point in each neighborhood?” LoBene said.

Other allocation options for the county, as well as for Las Vegas, North Las Vegas and Henderson, include offering down payment and closing cost assistance to low- and moderate-income home buyers, or residents whose household incomes don’t exceed 120 percent of an area’s median income. At least 25 percent of the money must be used for residents whose income does not exceed 50 percent of a region’s median — and not necessarily for former homeowners whose properties were foreclosed.

The state Housing Division has a different question of allocation before its staff: how to divvy up $24.3 million between cities and counties that didn’t get direct funding, including Washoe County and Carson City, and those that did. Charles Horsey, the division’s administrator, said his staff was ironing out its recommendations Monday and hoped to present them to the governor’s office this afternoon. It’s possible funding could be earmarked before the legislative session starts next year, he said.

“We’re painfully aware that the money isn’t enough to cure all of the ills … out there,” Horsey said.

Although Northern Nevada cities and counties did not qualify for immediate funding from HUD, they figure to lobby Horsey or the governor’s office for cash.

“We’re not very happy about this,” Reno Mayor Bob Cashell said. “I hope they do not send the other $24 million south.”

Clark County will receive at least $22.8 million, Las Vegas at least $14.8 million, North Las Vegas at least $6.8 million and Henderson $3.2 million. The recipients must present an action plan for the money by Dec. 1, and spend it within the next year and a half.

Representatives of local governments said they were expecting to receive regulations on how to spend the money late Monday and would begin brainstorming how to use it.

Credits: Las Vegas Sun

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That screeching sound heard throughout Las Vegas Valley is the brakes being applied not only to large-scale Strip projects, but to many of the residential and mixed-use projects planned for the outskirts of town and outlying rural areas.

Two or three years ago, when the average worker was being priced out of the Las Vegas housing market, residential development boomed in Pahrump and Mesquite, where land was still relatively inexpensive and the towns were ripe for growth.

Expansive master-planned communities such as Coyote Springs 50 miles northeast of Las Vegas and White Hills in northern Arizona advertised the lifestyle and amenities associated with Summerlin and Anthem — poster neighborhoods in Las Vegas — at a significant discount in home prices.

Focus Property Group, which snapped up thousands of acres at public land auctions, sank more than $1 billion into the development of the Mountain’s Edge, Providence and Inspirada communities. The company also made a play in Pahrump with about 1,000 acres.

So-called “bedroom communities” were popping up in rural nooks such as Sandy Valley, Logandale, Glendale, Riverside and Indian Springs.

The housing and economic downturn has put a damper on most of those plans. Some have been slow to develop; others are changing direction.

Whether Las Vegas is on the verge of a boom or bust is a matter of opinion that’s been debated for at least 50 years, dating back to the infamous headline on the cover of Life magazine in June 1955: “Las Vegas: Is Boom Overextended?”

“The projects that were marketed to come on line and haven’t … am I going to suggest that those projects won’t get built? No way,” housing analyst Dennis Smith of Home Builders Research said. “Do you think Las Vegas will stop growing? Does anybody really think Las Vegas will stop growing?”

With higher gasoline prices, making the drive from Coyote Springs or Pahrump to Las Vegas will take a big chunk out of any home-price savings. Builders who were once headed for distant lands may now want to concentrate on projects closer to the city’s core.

“People are doing the math, figuring the extra gas costs, and will only make the drive if the home cost is so much cheaper it’s worth it,” California-based real estate consultant John Burns said. “If it’s $300 a month in gas, the house payment had better be $300 less.”

KB Home, one of the major builders in the 2,000-acre Inspirada development near Henderson Executive Airport, considered going outside the valley when land prices soared to more than $500,000 an acre, but it seemed like too much of a stretch at the time, said Don DelGiorno, division president for KB.

“We wanted to wait and see if they matured,” he said. “The world has changed a lot with housing and the price of gasoline. Obviously, the market is a challenge everywhere. You have to make do with what you have.”

Other builders at Inspirada are in trouble. Utah-based Woodside Homes is experiencing financial problems; Kimball Hill Homes filed for bankruptcy this year. Toll Bros., Meritage Homes and Beazer Homes are also partners in Inspirada.

Home building at Coyote Springs has been delayed 18 months and prices have yet to be determined, said Klif Andrews, Nevada division president of Pardee Homes.

“It’s partly the market — we’re not in a rush to get in the market today — and it’s partly slow construction activity,” he said. “It was difficult to complete some of the things we had to complete.”

The golf course is finished and open for play and some of the basic infrastructure is in place, including 21,000 feet of sewer lines and 11,000 feet of water lines. A water treatment plant is finished and a separate wastewater and sewer plant is near completion.

“You’ve got to spend $30 million on wastewater treatment before you can hook up one toilet,” Andrews said. “That’s why houses will always appreciate because it’s difficult and expensive to build in outlying areas.”

New-home sales have slowed to a crawl in Las Vegas, down 46.6 percent through July from a year ago, and new-home permits have dropped 61 percent, Home Builders Research reported.

Based on the first six months of permit activity and expected demand for the rest of the year, Smith projects 8,200 to 8,500 permits for 2008, the lowest total since the mid-1980s.

Jeremy Aguero, principal of Applied Analysis, a Las Vegas business consulting company, said all development projects have their problems, but when nothing is selling, nothing is going to get built.

“To believe that these outlying areas would have a free ride when the market was good or would disappear when the market is bad … those are equally tenuous positions to take,” Aguero said.

Communities such as Coyote Springs and White Hills have a relatively low land basis and are large enough to spread costs over hundreds of thousands of housing units, he said. They may become more than just “bedroom communities.”

“Who knows which ones will succeed and which ones will fail. But to suggest that the last boom in Southern Nevada will be the final boom is a silly proposition,” Aguero said.

With home prices down 25 percent from a year ago, Las Vegas is one of the top five cities in the nation for long-term investment, Burns said. He isn’t projecting price increases in any of the 100 markets he tracks for demand, supply and affordability.

“There’s a real misnomer that Las Vegas is supply-constrained,” Burns said. “If I had a dollar for every time I heard that. I know a lot of land is owned by the Bureau of Land Management, but there are hundreds of subdivisions to choose from.

“While it is supply-constrained compared to Phoenix, the average consumer doesn’t see that,” Burns added. “That’s what drove people to speculate on development in outlying areas. That’s partly misguided on their part.”

The housing downturn and rising gasoline prices are each exerting a significant contractionary influence on the nation’s gross domestic product, author James Hamilton wrote in a June 12 article for SeekingAlpha.com. There’s also an interactive effect between the two.

“Temecula is a community in Southern California some 60 miles from downtown San Diego and not a whole lot closer to anywhere else,” the University of California, San Diego professor wrote. “And yet I’ve known people who commute to work here from Temecula, having been willing to trade driving time for more affordable housing.

“The population of Temecula doubled over the last decade,” Hamilton continued. “But with gas now nearing $4.50 a gallon in San Diego, the housing-commuting trade-off is looking a lot less favorable for these exurban communities.”

Mark Dunford of Las Vegas-based American West Homes said people were willing to commute long distances if they could save money on their homes, but that was before oil prices doubled.

American West is holding onto about 1,200 acres for its Mountain Trails community in Pahrump, working on entitlements and underground infrastructure.

“We’ll do fine,” Dunford said.

Smith of Home Builders Research said “bust” may be an overreaction to the slowdown in rural residential development. He says that “delay” may be more appropriate.

“Bust suggests it’s gone away, but they haven’t gone away. They’re waiting for the financial situation to improve so they can move forward,” he said. “If the financial situation improves, then consumer demand will improve. You have people trying to buy today, but they can’t qualify.”

The average cancellation rate was 24 percent in June for all new-home subdivisions in Las Vegas, Smith noted; it was 33 percent in May.

Providence, a 500-acre master-planned community in northwest Las Vegas, is slowly being built, though a couple projects there have been canned, Smith said.

“It’s not a bust,” he said. “There’s houses closing escrow out there every month. I’m not saying builders wouldn’t like to see more. Pretty much every builder has looked at every subdivision and retooled it to get the product and price point where people will buy.”

KB responded to current market conditions by offering smaller floor plans and bringing prices down to the $140,000s. Sales are always a challenge in Las Vegas during the summer months, DelGiorno said, but he’s getting four to five a week at Inspirada.

A marketing employee at Rhodes Homes said the 5,000-acre Pravada community near Kingman, Ariz., is in the midst of government approvals. Construction is scheduled to begin early next year.

Most local housing analysts agree that residential communities in northern Arizona won’t blossom until the Hoover Dam bypass bridge over the Colorado River is completed in about two years.

Credits: Review Journal

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D.R. Horton has announced its S.A.D. Sale to take place on Sept. 6 and 7.

“S.A.D. is our acronym for Seller Assisted Down Payment, more commonly known as down payment assistance,” said Jeff Ward, director of marketing. “It also expresses the way many of us feel about the end of these programs. Currently many of our homebuyers are taking advantage of Down Payment Assistance, but recent legislation will prohibit the program in the near future. People looking to buy a home priced below $400,000 are going to regret it if they miss out on this.”

Ward is referring to the much publicized Housing and Economic Recovery Act of 2008, signed by President Bush on July 30. Two of the reforms in this bill, a tax credit for first-time buyers and a foreclosure rescue program, have been widely praised by consumer advocacy groups.

However, the act also will eliminate the use of down payment assistance programs funded by those who have a financial interest in the sale.

Thus, home builders such as D.R. Horton will no longer be able to provide this program after Oct. 31.

“The S.A.D. Sale will take place on the absolute last weekend we will offer this program,” Ward said. The Federal Housing Administration requires all applicants qualifying for down payment assistance have final credit approval by Sept. 30. For a very limited time, we may be able to arrange for a qualified buyer’s F.H.A. down payment to be provided to them. In some cases, that’s up to $12,000. In addition, the new federal law allows first-time homebuyers a tax credit of $7,500. Our promotion wraps all these opportunities together with our lowest prices of the year. In many instances, we will sweeten the deal with great financing packages.”

For more than 10 years, D.R. Horton’s Las Vegas Division has been known as the Las Vegas Valley’s leader in single-story homes.

Twenty-two of the builder’s neighborhoods exclusively showcase single-story homes that range from 1,000 to more than 5,000 square feet. Many ranch-style floor plans feature dual master bedrooms.

“More and more families find themselves housing multiple family generations,” Ward said. “Our 2350 and 2550 dual master floor plans have been a huge hit for families with grown children.”

D.R. Horton has recently lowered the sales price of the award-winning 2350 floor plan for the S.A.D. Sale.

The Las Vegas Division’s portfolio of single-story homes can be viewed at DRHorton.com.

Over the past seven years, D.R. Horton has unveiled a line of townhome floor plans called triplexes. They feature attached garages and amenities, including swimming pools.

These floor plans are typically offered in the builder’s Ranch communities. The Horton Ranches offer multiple model complexes in a wide range of price points, beginning in the low $100,000s.

Each of these communities has homes available for the S.A.D. Sale.

D.R. Horton Inc. was named the nation’s largest home builder in the May 2008 issue of Professional Builder magazine. Nationwide, the builder closed 37,717 homes in calendar year 2007. D.R. Horton’s Las Vegas Division has an inventory of more than 100 homes available for move-in within the next 60 days.

D.R Horton is offering down payment assistance in 20 of its 35 valleywide communities, as well as four communities in Laughlin.

Credits: Review Journal

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