Builders and developers are getting creative with higher end residential and commercial developments that are enhancing the greater Las Vegas Valley. Economic and housing market fundamentals are also improving in Las Vegas. Employment growth increased for the fourth straight year in 2014, and foreclosures and notices of default (which prolonged the market stagnation) are at a fraction of the peaks from 2009 to 2011. This stabilization has afforded the resurgence of the move-up and luxury housing and retail markets. Our Senior Manager of Advisory JT Schwartz outlines four trends worth monitoring:
1. The move-up and high end for-sale market is back, spearheaded by Howard Hughes’ The Paseos and The Ridges, in Summerlin. The Paseos are a series of move-up-focused subdivisions in Summerlin that have been heavily coveted by builders, with nearly every major Las Vegas builder either actively building (eight active projects today) or actively pursuing a neighborhood in this community. In addition, William Lyon Homes has had incredible sales success at Sterling Ridge, part of The Ridges neighborhood (see image below). In a little over one year, William Lyon sold 95 luxury homes with base prices currently ranging from the mid $800,000s to over $1,300,000. In fact, available home prices in their larger Premier series increased by +/-50% since opening in November 2013.
2. There is a limited supply of move-up and high end for-sale housing in Las Vegas. Summerlin and a restructuring Lake Las Vegas will be at the top of a short list of move up and high end supply options in the near term, particularly as Southern Highlands and Anthem reach their build out. While there are multiple other large-scale master plans on the horizon such as Cadence, Park Highlands and Skye Canyon, these will likely focus on the conventional market and will succeed master plans like Mountain’s Edge and Providence.
3. Higher end, luxury apartments are also starting to make their way to the market. Amenity-rich, higher end communities such as The Lennox (see image below), The Gramercy, Constellation at Summerlin and Elysian at The District (Green Valley Ranch) are making their way into the market at rents above $1.50 per square foot. We are monitoring the lease-up success of this new rental wave.
4. Commercial development in Las Vegas has been elevated with the opening of Downtown Summerlin. World class dining, shopping and recreation are offered as an alternative to commuting to other areas of the Valley for a similar experience (The Strip, Downtown, Henderson). When walking through this destination lifestyle center it is apparent that Howard Hughes carefully created a complete Las Vegas experience at Downtown Summerlin for both locals and tourists. It is a seamless complement to the neighboring Red Rock Resort and Casino (see image below).
From 2008 to 2012 entry level housing dominated the Las Vegas housing landscape as the move-up and high end residential market virtually disappeared. Today’s resurgence of luxury housing and commercial development is a sign of pent-up demand that will likely be present for the long term.
Contact us to help you with your Las Vegas development questions, and/or how we can assist in your market.