New-home sales set another record in 2004, data show

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Home Builders Research reported a record 29,248 new home sales for Las Vegas in 2004, an increase of 4,018, or 15.9 percent, from the previous year.

The number includes 3,203 closings in December, a strong finish for the year, said Dennis Smith, president of the local housing research company.

Even more impressive, he said, was the new home permit total of 32,879, an increase of 7,666, or 30.4 percent.

Smith said the new home sales include 667 apartments that were converted to condominiums.

They were originally mapped as condos and were renovated, which does not require a new building permit.

"This was one of the attractive features to many developers and investors who bought these apartment complexes," he said.

The median price of a new home in December rose to $290,287, up 38.5 percent from the same month a year ago.

"We were hoping the the new home median price would stay under $300,000. It now looks that this next hurdle will be surpassed by the second quarter of 2005," Smith said.

He said base prices on builders' brochures leveled off in the fourth quarter and were a few price "adjustments" in some communities, but they were limited to only a few builders, primarily in the far northwest and southwest Las Vegas Valley.

It was not a general market problem, Smith said. Overall, the housing market responded as expected to softening demand and a rise in resale inventory, he said.

Smith counted 4,329 sales of existing homes in December, bringing the final number to 64,168, a 28.9 percent increase from 2003.

The median price of a resale was $250,000, up $70,000, or 38.9 percent, from a year ago.

With the inventory of homes for sale above 11,000, Smith said he expects only a small price movement in the resale market.

Restrepo Consulting Group principal John Restrepo said strong economic fundamentals are driving the record-breaking Las Vegas housing market.

Clark County job growth pushed the ratio of employment to building permits to 1.46 in October, compared with 0.83 at the end of 2003 and a norm of 1.26, Restrepo said.

Employment grew by 47,500, while 32,156 housing permits were issued during the same period.

"We're doing real well," Restrepo said. "Employment growth is strong and because of that we have continued housing growth."

He expects the valley's employment-to-permit ratio to climb in the coming months as the housing market moves from low mortgage rate-driven demand to employment growth-driven demand.

Construction remained the "bright light" of Nevada's economy, despite a seasonal loss of 1,200 jobs in December, said Jim Shabi, economist for the Nevada Department of Employment, Training and Rehabilitation.