Home subscribe manage Las Vegas Review-Journal
  Jobs Cars Homes Shopping Travel Weddings Golf Best of Las Vegas Photo   Search:

RECENT EDITIONS
Wed Thu Fri Sat Sun Mon Tue

Business
Nov. 17, 2007
Copyright © Las Vegas Review-Journal

Local housing shortage ahead, report predicts

Study sees demand for condos surging

By HUBBLE SMITH
REVIEW-JOURNAL

Work continues Friday on the Vantage Lofts condos on Gibson Road and Paseo Verde Parkway in Henderson. A report by the Southern Nevada Home Builders Association forecasts increasing demand for condominiums and townhomes in the next five years.
Photo by Marlene Karas/Review-Journal

Las Vegas is headed for a housing shortage by late 2009 that will intensify the affordability crisis for a growing work force, a report from the Southern Nevada Home Builders Association predicts.

The next five years will show a decrease in demand for single-family homes, but increased demand for condominiums, townhomes and apartments, the report said.

Newsvine Digg Fark Technorati reddit StumbleUpon del.icio.us Slashdot Propeller Mixx Furl Twitter MySpace Facebook Google Bookmarks Yahoo! Bookmarks Windows Live Favorites Ask MyStuff myAOL Favorites

Most Popular Stories
  • Harrah's Entertainment plans to lay off more workers
  • Casinos must wait for $800,000
  • $475 MILLION FOR SANDS: Loan fails to impress investors
  • PLAZA VERSUS PLAZA
  • Macau's drop-off hurting Las Vegas
  • INSIDE GAMING: Forty days, 40 nights and a cry of protest
  • Vegas atop home-price record drop
  • Greenspun Media Group lays off up to 10 percent of staff
  • MORTGAGE PAYMENTS SLASHED: BofA deal will help Nevadans
  • MORTGAGE MELTDOWN: Report: Bailout tally high



    • Specifically, the Southern Nevada market will demand 24,800 new condos in the next five years, compared with 18,400 in the last five years. The supply of single-family housing is projected to grow to 470,984 units in 2008, an increase of about 12,000 from this year.

    Owner-occupied units will fall from nearly 60 percent of all housing units in 2007 to 57 percent in 2012, according to the report, while renter-occupied units are predicted to grow from 40 percent to 43 percent.

    "Southern Nevada's housing trends are historically cyclical," said Jeremy Aguero, principal of Applied Analysis, the Las Vegas research firm paid to do the study for the home builders group.

    "Though perhaps not to this degree, we have experienced this sort of trough before," he said. "When you look at the data, we are in one of the stronger buyers' markets in recent history."

    The market started to slow in 2006 and built a supply-demand imbalance this year as the inventory of homes for sale grew to 28,500 and sales dropped below 1,000 a month. Some 9,200 homes have gone through foreclosure in the last 12 months.

    There's little doubt that the local residential market is experiencing one of the worst downturns in the last 20 years, Aguero said. The 794 single-family residential building permits issued in August were the fewest monthly total since August 1988.

    However, current housing instability appears linked to short-run factors, not a change in the region's fundamental competitiveness, Aguero said.

    "Simply stated, the fundamentals that made Southern Nevada's economy the nation's most prolific during the past two decades -- investment, employment, population -- remain sound," he said.

    Aguero's report projects 3.7 percent population growth in 2008 to more than 2 million people and 4.5 percent employment growth to 986,358 total employment in the valley.

    Housing analyst Dennis Smith of Home Builders Research said he doesn't necessarily agree with the report's conclusion that there will be less demand for single-family homes. Almost any family with children would prefer a detached home with a large yard, he said. Affordability is another issue.

    "There may be a shortage of single-family homes. Does that translate that there's no demand for single-family homes? No way," Smith said.

    Builders have cut back on permits by 39.3 percent this year and new home sales have exceeded permits by about 4,000 units, Smith reported.

    "My point is builders have been getting rid of inventory since January 2007 and they haven't been replacing it," he said. "I don't disagree that builders are slowing and there will be a shortage, but demand is still there."

    The number of finished lots being processed by builders since the beginning of the year has been "practically nil," Smith said.

    Alex Edelstein, developer of Manhattan mid-rise luxury condos on Las Vegas Boulevard South and Manhattan West under construction in the southwest valley, said the home building industry looks at housing as single-family versus condos, but when people look at buying a home, they're more concerned about how far they have to drive to everything.

    "We tell people that almost every single megatrend in America right now favors growth of condo demand," he said.

    Those trends include the decline of the family nucleus; increase in single women in the work force; downsizing by baby boomers; longer life spans for retirees; heftily rising U.S. population; and an increased premium placed on convenience and saving time, Edelstein said.

    Contact reporter Hubble Smith at hsmith@reviewjournal.com or (702) 383-0491.

    LAS VEGAS HOUSING SUPPLY
    2008 2009 2010 2011 2012
    Single-family homes 470,984 483,668 499,189 517,427 535,430
    Apartment units 161,369 164,685 169,400 175,982 182,238
    Townhouses 41,040 42,595 44,596 47,248 50,742
    Condominiums 79,399 82,436 86,989 92,065 97,389
    Other units 46,473 46,598 46,759 46,956 47,155
    Total housing stock 799,265 819,982 846,933 879,677 912,954
    Source: Applied Analysis


    Leave Your Comment 14 Reader Comments
    Terms & Conditions
    The following comments are provided by readers and are the sole responsiblity of the authors. The reviewjournal.com does not review comments before publication nor guarantee their accuracy. By publishing a comment here you agree to abide by the comment policy. If you see a comment that violates the policy, please notify the web editor.

    Some comments may not display immediately due to an automatic filter. These comments will be reviewed within 48 hours. Please do not submit a comment more than once.
    Current Word Count:

    huh wrote on November 18, 2007 01:29 AM: yeah, you are a schumucko


    Schmucko wrote on November 17, 2007 08:44 PM: Jeez you people are dumb. If you take amoment to drop that drink and the old Mary Jane for a moment! Look at the reality of the economics that is going on! Housing meltdown, mortgage meltdown, credit meltdown, dollar meltdown, Clark County water shortages, Nevada State budget shortfalls and you dont think we are heading for a long term recession? Or God forbid worse! Dont think so??? The GOP Bush Admin is despartely trying to hold off a total collapse until after the election. The Fed and International banking interests have poured more money into the creditsystem/equity markets in the last three months than since 1931. All in order to stem the complete failure of the monetary structure as we know it! The coming situation will make Enron and WorldCom look like a joke! Forget about building more housing and think about preserving what you got now!


    greco wrote on November 17, 2007 04:25 PM: Don't forget that we still get 4,000 to 5,000 folks moving in every month, plus all the new properties on the strip will create such a vaccum of new opportunities, that would drive the cost of housing back up. Right now the market is adjusting to the mortgage industry, and eventually the inventory available will be depleted. The reality is that Las Vegas housing market will eventually match the other markets close by.


    peter thompson wrote on November 17, 2007 01:15 PM: Two stories in todays edition advocating both the fear and greed elements necessary to drive any market force. "Single Family Homes under $20000" and now this one which brings the fear element into place.

    Way to go RJ in making the truth the victim. The real reason why were in this mess is the exact people who are now continuing to publish false and manipulative stories such as these.

    Heres a better link to a story thats more informative than this one:

    http://www.canada.com/nationalpost/columnists/story.html?id=39d470d5-e383-4991-bdb5-0abb1f6a94bd


    Mark wrote on November 17, 2007 11:43 AM: There is no shortage of land-they can build down to Primm and up to Indian Wells or Moapa. House prices will decline for years; only suckers will buy now.


    d wrote on November 17, 2007 10:54 AM: IF you remember Statistics 101, you can manipulate any data to get the results that you want.
    This is another push of a local association to try to drum up demand.
    As home prices fall, and condo prices stay flat (considering that these are all in construction defect litigation due to poor build quality)How would it be economically feasable for one to pay more for a condo, than a singl family home. What mooron thought of this conclusion?


    d wrote on November 17, 2007 10:35 AM: More Rubbish,
    This is a ridiculous story


    Richard Blum wrote on November 17, 2007 10:05 AM: I think your numbers are dead data and thereby very linear in nature, but useable for this statement of the future. The fact still remains that until the feds fix the mass economy enough to bring back a sense of well being, where anticipation of home ownership and all that it represents become valued again, then KB, Astoria, and all others you mentioned could reduce their prices to $50,000 and all they would get is investors - not home owners. One fix that comes to mind is to recreate legislation absolutely forbidding off book banking practices ussured in approximately 14 years ago by killing off - with the stroke off a pen - certain acts put into place in the great depression to protect us from exactly what is happening right now - that is banks and brokerages creating worthless paper just like they did in 1929. A harbinger of this comming right at us can be found in Enron and Tyco off book entries that caused them - and us - so much loss. I'm believe there are others. In conclusion, just put back our protections and tell the lobbiest to find some other item to sell congressmen and women on that does not hurt the general public or our economy.


    Willy wrote on November 17, 2007 09:48 AM: Dirt poor wages JH? Is that "minimum wage" dealer, bartender or cocktail girl scraping by or something? Houses are never going to sell for $125k again, that boat left the dock a long time ago. Not that they need to either, median priced condos are affordable for couples making with two incomes of $13/hour. Unless these couples are both working at fast food I think they can afford to buy now. The issue, as it always will be, is do these couples have the discipline to save a down payment?


    JG wrote on November 17, 2007 09:38 AM: Give me a break! Just read the first sentence of the article and that tells you who is trying to push this theory!


    Read All Comments