Summerlin remained a top five master plan in the nation during the first six months of 2023, but Las Vegas builders in master plans have been hit harder overall than other communities across the nation in comparing year-over-year sales.
Summerlin recorded 544 sales between January and June, according to national consulting firm RCLCO, which prepares a mid-year report. That’s 8 percent below the 592 sales during the first six months of 2022.
Summerlin’s national mid-year ranking fell from fourth to fifth with 48 fewer sales. It was barely overtaken by Ontario Ranch in Southern California with 548 sales.
The Villages in Florida easily retained its top spot with 1,900 sales. It was followed by Lakewood Ranch in Sarasota, Florida, with 1,227 sales while Sunterra in Katy, Texas, ranked third with 669 new home sales.
“Summerlin’s mid-year 2023 ranking is a testament to the community’s enduring appeal — not just as a place to live, but where families work, learn and play,” Frank Stephan, president of the Nevada Region for The Howard Hughes Corp., the developer of Summerlin, said in a written statement. “Thanks to our roster of the nation’s top homebuilders, a robust infrastructure that includes more amenities than any other Southern Nevada community, and more educational options with 26 public, private and charter schools, it’s no surprise that Summerlin remains the top choice of Las Vegas Valley residents and families seeking quality of life.”
Stephan said Summerlin’s home sales continue to be driven by the “burgeoning Summerlin West area,” currently home to 14 actively selling neighborhoods offering homes “in a variety of price points and styles and situated on elevated topography that overlooks the valley to the east.”
Downtown Summerlin’s continuing evolution is also a key driver of home sales, Stephan said.
“With new Class-A office, a growing number of luxury apartment homes, major sports venues including City National Arena and Las Vegas Ballpark, as well as 125 exciting retail and restaurant brands, Downtown Summerlin has become the community’s central gathering place and serves as a big draw for residents,” Stephan said. “It is also a premier place to work for businesses and professional firms seeking a vibrant and walkable environment for employees and clients, alike.”
Summerlin ranked in the RCLCO top 10 at the end of the year from 1994 to 2007 and from 2015 through 2022. It’s on track to continue that distinction in 2023.
Other master plans see dip in sales
Besides Summerlin, other master plans saw a decline in sales as well with Inspirada in Henderson and Skye Canyon in northwest Las Vegas facing the biggest hit. The doubling of mortgage rates over the last year have slowed home sales in the marketplace overall. Skye Canyon even fell out of the top 50 in the nation.
The drop in master-plan sales tracks with the market overall. Andrew Smith of Las Vegas-based Home Builders Research reported this week that second-quarter net sales in the Las Vegas area fell 7 percent compared to the second quarter of 2022. For the year, closings are down nearly 9 percent compared to the first six months of 2022.
Inventory is also dropping with 23 percent fewer permits issued during the second quarter and new projects are down 33 percent over the last year. The median price, meanwhile, rose .01 percent, Smith reported.
Cadence, which fell from No. 7 a year ago to No. 10 in this last report, has fared the best among the master plans in terms of its steadiness over the last two years. It recorded 445 sales, a 3 percent decline from the 459 in the first six months of 2022. It is also consistent with the 460 sales in the first six months of 2021.
Summerlin had a steeper decline down from the 962 sales during the first six months of 2021.
Inspirada had 260 sales in 2023, down 33 percent from 388 a year ago, and it fell in the rankings from 12 a year ago to 39 this year. Inspirada had 460 sales in the first six months of 2021.
Skye Canyon fell from 18 a year ago to 53 in 2023 with 206 sales, down 38 percent from 333 a year ago. Skye Canyon had 375 sales during the first six months of 2021.
Valley Vista in North Las Vegas, the project of D.R. Horton, which fell from No. 6 in the 2021 mid-year rankings to No. 51 in 2022, didn’t make the top 50 this year either. Las Vegas’ decline bucks the national trend in which sales in the top 50 master plans rose 7 percent year over year. Las Vegas had four of the 14 master plans that saw a decline in sales, with only one in Silverado in Aubrey, Texas, at 41 percent, recording a greater decline than Inspirada and Skye Canyon.
Cheryl Gowan, Cadence’s vice president of marketing, said they continue to sell “quite a few homes each week, and we expect that to continue.” Gowan said Cadence has done “fairly well” considering where builders and developers saw the year in January. Sales have been consistent.
“The way things are now, they’re very positive,” Gowan said. “If we keep at our current pace, we will exceed last year’s total sales. We see some strong sales happening in the fall and into the winter months.”
Builders have had various incentive programs from buying down interest rates and incentives for upgrades, Gowan said.
In Cadence, Century Communities has opened three new communities, two with single-story homes and another with duplexes and town homes in the $300,000s. Century will be opening two-story homes in August, Gowan said.
Lennar has three communities in the process that will start selling soon with townhomes, single-story and two-story homes. Woodside Homes has a neighborhood with two-story homes that will start selling in August, Gowan said.
“We’re seeing a range of buyers from first time to move up and empty nesters,” Gowan said.
Aaron Hirschi, the president of KB Home’s Las Vegas division and master developer of Inspirada, attributes the year-over-year decline there to builders wrapping up their communities with the exception of KB Home. Inspirada is approaching the final couple of years, and there just aren’t as many builders still in there, he said.
“Inspirada is still our flagship community, and we’re still going strong with four product lines that meet the needs of multiple buyer types,” Hirschi said. “It has been one of the most successful Las Vegas master plans and rooted in affordability and amenities. The Town Center at Inspirada continues to grow. Inspirada Station has been approved by the Henderson City Council and expected to break ground in the first part of 2024. That will be an exciting amenity for all of the people living out there. We have an $18 million park expected to open in November.”
Inspirada has just under 7,000 home permits obtained with plans to build out at 9,000, Hirschi said.
Hirschi said no one should look at the overall decline in master-plan sales in Las Vegas compared to other cities and see a problem. It’s just a reflection of whether master plans are in their development cycles with available communities, he said.
Even master plans like the Villages at Tule Springs in North Las Vegas, which did not make the top 50 in the RCLCO rankings, are in the land-development stage and will be bringing out more product, Hirschi said.
“If anything, I think Vegas is experiencing stronger demand than a lot of the major markets,” Hirschi said. “In a lot of the reports I have seen lately, Vegas is seen as one of the top places for people considering relocating.”
The lack of resale supply has bolstered the demand for new homes, Hirschi said.
“Buyers that were on the sidelines or looking at the interest rate hike, most of them have come to accept higher interest rates are here to stay for awhile and life goes on,” Hirschi said. “Homeownership is still an important part of their life, and they are coming back to the market, and we’ve seen a lot of strong interest, particularly the first-time buyers and millennials that make up the majority of that. We’re bullish on the master plans we’re building. Summerlin has the biggest runway of remaining land, but there’s the Kyle Canyon Gateway in Las Vegas and Tule Springs has a lot of runway to go. There’s a lot of land development that has to happen in the meantime.”
Karl Pischke, a principal at RCLCO, said his company continues to hear optimism from master-plan developers in Las Vegas despite a slower housing market compared to the first six months of 2022.
“Master-plan communities still seem to represent a safe haven for a lot of consumers,” Pischke said. “The demand appears to be there and in many markets, and Vegas is no exception to that, one of the key drivers of master-planned communities is inventory availability. What we saw in 2022 was a lot of issues related to supply-chain disruptions even though that has been lessened somewhat this year and is still impacting some communities to fully get caught up in terms of inventory.”
Pischke said Las Vegas has cooled more than other markets and pointed to increasing affordability issues and higher mortgage rates. There is some optimism because of the lack of inventory of resale homes on the market, he added.
“What we heard when we spoke with them is they don’t necessarily see the second half of the year as being stronger than the first half of the year, and most said they expect a fairly similar second half of the year,” Pischke said. “If anything, what we are seeing more broadly, and what Vegas will likely continue to experience is that as mortgage rates stay elevated or potentially increase, there are a lot of homeowners who are hesitant to get out of their lower mortgage rates and put their homes on the market. That is tightening of existing home inventory that will continue to make new housing options attractive for many consumers. With builders able to offer additional incentives and buying down rates, I think there’s reason to be optimistic about new home sales in Vegas, especially if you are in a master-planned community where you offer that lifestyle and amenities and safety in value.”
Pischke said when they asked master plans across the country what were the top reasons for their increase in sales, they said it was inventory to meet demand and additional home products to meet various price points.
“Even though we’re seeing a slight decline and somewhat slower housing market in Vegas, I think it’s important to note they are showing that decline within a group of the best and fastest-selling communities in the country.”
Pischke said. “It’s important to note these communities are delivering an excellent experience year in and year out to consumers and creating a lifestyle and amenities that folks are looking for in these markets. That’s allowing them to stay in these top ranks even if there is a slowdown with interest rates.”