Southern Nevada homebuilders continue to struggle this year, with lower sales and a rising volume of canceled deals, a new report shows.
Local developers sold 509 new homes in October, bringing the year’s total to 4,847, down 22 percent from the same period last year, according to Las Vegas-based Home Builders Research.
The median price of last month’s closings was $287,588, up about 1 percent from the same time a year ago.
Builders pulled 514 construction permits in October, “much less than we had hoped to see,” Home Builders Research President Dennis Smith wrote in the report.
That put this year’s permit tally at 5,747, a slide of 6.6 percent from the same period last year.
Smith attributed the decline to processing delays with Clark County.
The time it takes to process project plans “has almost doubled, which is ridiculous,” Smith wrote, adding that the delays have not occurred in the cities of Las Vegas, North Las Vegas or Henderson.
County officials have told homebuilders they are working to process plans faster. But the delays are adding expenses for builders, who “in turn will raise prices for consumers,” Smith wrote.
The county eliminated staff during the economic downturn, but now that the real estate market is improving, "many in the housing industry believe our services should perform at the pre-recession level," Dan Kulin, county government spokesman, said in a statement to VEGAS INC. "We are concerned with the review times and have been adding staff as the strength of the market continues to improve."
Meanwhile, buyers increasingly are canceling sales, Smith reported.
Buyers backed out of 21 percent of new-home sales contracts in Henderson last month, up from 12 percent in April, according to Smith, who said he picked April randomly as a point of comparison.
In North Las Vegas, cancellation rates jumped to 34 percent from 25 percent in that period; in the northwest valley, it went to 24 percent from 13 percent; and in the southwest valley, it rose to 22 percent from 19 percent.
Smith attributed the rise in large part to tougher mortgage qualifications. The guidelines stemmed from the recession and are meant to ensure that borrowers can repay their mortgage.
Overall, Las Vegas’ new-homes market is not as robust as industry insiders want it to be, although the normal holiday slowdown is also a factor now, Smith said.
“The new-home market demand in Las Vegas has stabilized — or shall we refer to it as flat demand — going in to the holiday season of 2014,” Smith said in his report. “The activity is obviously not as good as most would like, but we expect some softening every year as November and December come and go.”
Throughout the year, however, sales have plunged in the Las Vegas Valley as would-be buyers, faced with credit woes, flat wages and sticker shock, can’t pay developers’ higher listing prices.