Arizona-based Meritage Homes Corp. announced it was winding down operations in Las Vegas and would exit the struggling market in early 2013.
“It’s a sad state of affairs there,” executive Brent Anderson said during an interview Friday.
He said home sales by Meritage had fallen to 79 last year from 653 in 2005.
“When the market crashed, it crashed hard,” he said.
Anderson, vice president of investor relations at the Scottsdale, Ariz., homebuilder, said the decision to leave the Las Vegas area was driven in part by the currently weak market and projections by industry analysts that Las Vegas would take several more years to recover.
The company's eight to 10 full-time Las Vegas-area jobs may be redeployed along with other resources to more promising markets such as Tampa, Fla., which Meritage announced plans to enter on Friday.
Anderson said that the plan to wind down operations involved continuing to build homes on 75 lots in Meritage’s two local active communities.
Some 375 lots elsewhere will be sold, likely to other homebuilders.
Because of the plan to exit the market, Meritage expects to take an $8 million charge against earnings to write down the value of its Las Vegas land holdings.
Meritage is one of the smaller players in the Las Vegas market, which it entered in 2002 with the purchase of Perma-Bilt Homes.
VEGAS INC research shows that in Las Vegas, the company was the market’s 14th largest homebuilder in 2009, with sales of 113 homes valued at $22.9 million.
Meritage has also been mired in litigation over the forced bankruptcy of the Inspirada planned community in Henderson.
While its homebuilding partners settled a dispute with lenders over Inspirada, Meritage called the settlement discriminatory and last month appealed approval of the Inspirada bankruptcy reorganization plan.
Overall, the Las Vegas homebuilding market has continued to struggle this year. Home Builders Research Inc. reported that through October, new home closings locally totaled 3,155 — down 1,440, or 31 percent, compared to the same period of 2010. The 2010 numbers were boosted by a temporary tax credit.
The median price in October was $196,360, a year-to-year decrease of more than $16,000, or 7.6 percent, Home Builders Research found.
And with the glut of foreclosures in Southern Nevada and so many homeowners underwater, it’s unlikely the market will produce a surge of new buyers anytime soon, Anderson said.