Homebuilder pulling out of Las Vegas market
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2 December 2011
1:06 p.m.
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.
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I'm actually surprised it took them this long to make that decision. We're only 3-1/2 yrs into the lost decade so it's going to be another 5-6 yrs before you see any kind of turnaround much less bottoming of the housing market
They clearly have not factored in that a few little companies moving downtown with all that revitalization of the region will change everything and create plentiful, high-paying jobs which will fuel new real estate growth.
Oh wait, yeah that won't happen. Move along.
Good riddance. This is just a company who threw up poorly built houses and charged customers $200,000 more than they were worth. So no love will be lost when these crooks leave the valley. Now all they gotta do is take all the others with them.
A more promising market like Tampa Florida, what planet are these people on? Friends of ours have been trying to sale their 3 bedroom 2 bath home near the gulf near Tampa for 2 years now. They have dropped the price to around $95,000 and the house is only 5 years old. We were in Tampa in August and if you think Vegas is bad take a sunny drive through Florida someday.Tampa a promising market, what a laugh.
p
The market rates may have gone down, or remained the same. For the homeowner to get qualified for lower rates, there are certain prerequisites but I would recommend you search online for 123 Refinance before you decide because they can find the 3% refinance rates.
Looking on the bright side, it's less competition for our local companies.
I was just in the Tampa Market a few months ago. If they can make it there - Good luck, it looked like Vegas with all the investors having abandoned their second, third and fourth homes.
Any builder that is not constructing High End Quality Homes, To an Order, is adding to the Fire Sale. In Las Vegas there will be a Glut for 10 Years, by which time many of these Poorly Built, Designed, and County Inspected Homes will become part of the Largest Ghetto in the World.
Read the "Toll Brothers" housing forecast for one of the more honest projections of what is happening in the housing market.