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Unprecedented Appreciation

The feverish Las Vegas housing market showed no signs of cooling off in February with home sales and prices reaching uncharted territory, local research experts said Tuesday.

The average home sold within 27 days of being listed and at 99 percent of its list price, he said.

Realtors have said they're getting multiple offers beyond the list price in some of the more desirable neighborhoods.

Both the new and resale markets are now in uncharted territory, Larry Murphy of Salestraq said.

"What is going on with the real estate market in Las Vegas? I've got a new buzzword for it -- hyperactive," he said.

Dennis Smith, president of Home Builders Research, counted 2,256 new-home sales in February, compared with 1,652 in the same month a year ago.

For the first two months of the year, new-home sales are up 35 percent to 4,307.

"All the projections for this year are going to be low," Smith said, "but you have to be conservative. If I'd predicted 35 percent growth, people would have said I'm crazy."

Murphy said prices in Pulte's Escala subdivision in Summerlin increased 41 percent in a three-week period from February to March, going from $410,990 for the lowest-priced plan to $601,990 and from $470,990 to $664,990 for the top plan.

Tom McCormick, president of Astoria Homes, said he sees no end to rising home prices as long as people continue moving to Las Vegas and the Bureau of Land Management keeps its squeeze on the amount of public land put up for auction each year.

"If anybody knows, we would all pay a lot of money for them to tell us. I thought long ago prices would level out," he said. "Either interest rates go up and that hurts everybody or prices get so high that nobody can afford a new home."

"There's a bunch of factors that go into home prices, and the No. 1 underlying issues is the price of land," Smith said. "Supply is getting smaller. We're absorbing more land than the BLM is replacing. As long as that happens, the price of land will go up."

Lack of new homes coming on line continues to be a problem, Murphy said, as Las Vegas Valley has about a two-week supply at the current absorption rate.
A housing market is considered good when the supply extends three to six months, he said.

"There is virtually no standing new home inventory in Las Vegas, nor has there been for the past year," Murphy said.

The pool of existing homes for sale dropped 60 percent in February to 1,455, compared with 3,698 a year ago.

Astoria, which builds smaller homes targeted toward first-time buyers starting at about $150,000, closed on 780 homes in 2003 and plans to grow that number to 1,100 this year, McCormick said.

The private Las Vegas home builder has cut off all sales of new homes to investors, who some say have driven up prices and dragged down neighborhoods with rental properties.

Astoria stipulates on the deed that the home must be owner-occupied.

"People have to see these are quality neighborhoods," he said.

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