Las Vegas placed five master plans in national rankings

It is the first time since 2016 when one metro area has had five or more communities within the top 25, according to the midyear report released by RCLCO, a national real estate consulting firm. Houston had six communities within those ranks in 2016.

A year ago, Las Vegas had five communities in the top 27 at midyear when sales slumped in the second quarter because of the COVID-19 pandemic. Las Vegas’ sales in the five master plans — up 36 percent — is running ahead of the 20 percent gain among the top 50 master plans when compared with 2020.

In its report released this week, RCLCO had Summerlin at No. 3, Valley Vista in North Las Vegas at No. 6, Inspirada at No. 11, Cadence in east Henderson at No. 13 and Skye Canyon in northwest Las Vegas at No. 23.

Summerlin, which ranked No. 4 in the nation at midyear 2020 and finished the year at No. 3, saw its sales increase 50 percent from 642 between January and June 2020 to 962 in the first six months of 2021.

Valley Vista, a project of Texas-based builder DR Horton, had 506 sales in 2021, a 7 percent increase over the 475 in 2020. It came in at No. 6 in the nation — the same spot it ended 2020.

Inspirada, which is almost exclusively a project of KB Home, had 460 sales through June, a gain of 64 percent over the 280 sales in the first six months of 2020. It had finished 2020 as the No. 27 master-plan community — its lowest ranking in years. The strong sales boosted its midyear ranking to No. 11, only seven sales away from No. 8.

Cadence, which came in at No. 13 at the end of June, had 440 sales for 2021. That’s up 24 percent from 356 in the first six months of 2020.

Skye Canyon was ranked No. 27 with 375 sales, 100 more, or a gain of 36 percent, over the first six months of 2020. It was ranked No. 46 at the end of 2020 when it had 472 sales for the year, a gain of 12 over 2019.

The top-selling community was Sarasota, Florida’s Lakewood Ranch with 1,535 sales through June, 83 percent ahead of last year’s pace.

The Villages in Florida was No. 2 with 1,226 sales. Some 75 percent of the sales within the top 50 occurred in Florida, Texas and Nevada. Nevada makes up 11 percent, which RCLCO Vice President Karl Pischke said shows that “Nevada is punching above its weight” for master plan sales.

Pischke said what’s impressive about Las Vegas’ numbers is that it has five master plans in the top 25 when it’s just outside the top 25 metropolitan areas in the nation in population. It had 2,743 sales in those five master plans for a 36 percent gain of just over 2,000 in 2020.

“Getting five communities in the top 25 in any year is an impressive performance and speaks to the attractiveness of Las Vegas as a destination where they can attract that level of home sales,” Pischke said. “Looking back at some of our previous rankings of the five to seven years, the other metropolitan areas that have come close have been Houston and Phoenix. With the size of Las Vegas it’s an impressive accomplishment.”

Pischke said buyers during the COVID-19 pandemic have been looking for more suburban environments and away from urban areas. Las Vegas continues to benefit from that, he said. The city’s master plans promote fitness and outdoor lifestyle and are on the edges of the valley away from the Strip and urban core.

“One of the things we noticed are the demographic tailwinds that are driving single-family home sales across the country but in markets like Las Vegas,” Pischke said. “We have a millennial generation that’s moving into peak family formation years and transitioning into single-family living — interested in moving up to more space. We have a confluence of demographic tailwinds, incredibly low interest rates and a pandemic (that) has pushed a lot of households off the sidelines (to) go ahead and buy a home. That’s benefited a lot of master-planned communities able to provide the diversity of housing options to attract the full spread of potential homebuyers from first-time millennials, move-up, more mature family buyers, empty nesters and retirees. Many of the master plans in Las Vegas are examples of communities that provide that diversity of housing options.”

The one concern for Las Vegas like many other communities are facing is the lack of labor and construction components to meet the demand, Pischke said. But, he added, Las Vegas benefited by allowing homebuilding to continue while other states slowed development amid the pandemic, he said.

“These master plans in Las Vegas have been able to keep a steady supply of lots for builders to meet the demand they have seen,” Pischke said.

Summerlin

Pischke said he is excited to see how Summerlin’s strength of sales plays out over the second half of 2021, and he expects strong demand to continue.

Kevin Orrock, president of the Las Vegas region for Howard Hughes Corp., the developer of Summerlin, said they hoped to rise to No. 2, but Florida sales were strong with retirees relocating from the Northeast.

“We’re pleased to be No. 3, and it’s been an amazing 18 months with the pandemic,” Orrock said. “Everything paused, and then came April and May and June and July of last year; it started taking off. That trend continued to where we are today. We still have 5,000 acres left in Summerlin, and the best has yet to come.”

Summerlin has benefited from its parks, schools, retail and other amenities, but the diversification in housing options in the western portion of the master plan has helped that growth. Town homes are selling for about $350,000 in a community where the average prices are closer to $600,000.

There are 19 subdivisions in Summerlin, of which 11 are in the west. It opened three subdivisions in the west in 2021, and eight will open by the end of the year, Orrock said.

“We have had subdivisions that have opened in the western division of Summerlin that are basically sold out,” Orrock said. “The demand up there is fantastic. We have a wide variety of prices in a small geographic area. You can buy a town home in Redpoint for $350,000 and buy a home in that area for $1 million-plus.”

Summerlin stands to benefit from demand whenever corporate relocations happen from California and other states in which employers bring thousands of employees, Orrock said. Commercial land is available in Summerlin for those campuses, and housing is available for their employees, he said.

“It’s not a matter of if but when,” Orrock said. “We just got to get that first name that has people saying wow. We have always been on the map, but with the sports venues now we’re really on the map. We got a lot to offer. Look at the Oakland A’s (looking at Las Vegas and Summerlin). That’s a game changer, too.”

Summerlin had 1,456 sales in 2020 — the most since 2007 — and Orrock said he expects sales to surpass that number in 2021 though there are some challenges for construction.

“Getting materials and appliances to open a home will slow sales a little bit,” Orrock said. “It’s not a demand issue, but it’s a supply issue.”

Valley Vista

Pischke said he doesn’t know why Valley Vista sales didn’t grow as rapidly in 2021 as the other master plans. The North Las Vegas development didn’t crack the RCLCO list until 2020.

“That is on the lower end of the other top five communities in Las Vegas,” Pischke said of its growth in 2021. “They were already at a strong sales pace last year. A potential component of that could be the availability of lots to meet new demand and, of course, the availability of supply for construction.”

Inspirada

Inspirada made a comeback after ending 2020 in 27th place — a year after it fell out of the top 10 to 13th place in 2019. Before that, Inspirada was ranked seventh in 2016, eighth in 2017 and ninth in 2018.

“They have been slowly falling down the ranking, but this report is really an indication that Inspirada is having quite the year by being up 64 percent and on track to have a strong 2021,” Pischke said. “Inspirada has done a good job of making sure their segmentation strategy has covered a wide array of buyers.”

Pischke credits Inspirada for creating a community with a lifestyle component that is even more desirable post-pandemic.

Brian Kunec, president and regional general manager of KB Homes’ Las Vegas and Seattle divisions, said: “It’s going fantastic.” He spoke glowingly about the growth in west Henderson with new restaurants and retail with even more planned.

“It’s hard to put a number on the Raiders’ impact, but putting the headquarters out there spurred a lot of activity and pushed the massive growth west Henderson is seeing right now,” Kunec said.

The pandemic and lack of lot availability in 2020 slowed sales more so than other master plans, Kunec said.

Inspirada had 595 sales in 2020, some 50 sales fewer, a decline of 8 percent, over 2019. It was the only master plan to report a decline last year.

Inspirada has closed about 4,500 homes and has a build out of 7,500.

“The only thing that is going to prohibit us from hitting the top master plans is that we’re more in the mature stage than some of the other guys,” Kunec said. “We’re kind of in the fifth or sixth inning while a lot of these other guys are in the second or third inning in terms of lot supply.”

Most builders have closed out their communities in Inspirada, so there hasn’t been the same volume of construction as in the past, Kunec said.

Relocations and people getting rehired has boosted homebuilding, and now there is not enough supply on the market, Kunec said. Las Vegas has been underbuilding for the past decade.

“The demand is far exceeding supply, and that’s driving a good market,” Kunec said.

KB Home is moderating sales releases to make sure the builder hits commitments to customers on when homes can be completed, Kunec said. From the start to finish, KB had built homes within four months, but it’s closer to five months today, he said.

“That is caused by supply issues out there and like, nationally, there’s a need for more labor in the construction industry,” Kunec said. “If we didn’t have (limits on supply and labor), we could build, as an industry, another few thousand homes if not a little more than that.”

Kunec said he doesn’t see demand slowing with Las Vegas reopening fully and people continuing to relocate to the state.

“The worst times are behind us, and we have a bright couple of years coming up,” Kunec said. “We’re bullish on Vegas and continue to invest and continue to open new communities. We see a lot of positive economic indicators in the valley, and we’re trying to put ourselves in position to take advantage of it.”

Cadence

Cadence at No. 13 had a strong second half of 2020, and Pischke said it will be interesting where it ends 2021. It was ranked No. 14 midyear 2020 and No. 10 at the end of the year.

Cheryl Gowan, Cadence’s vice president of marketing, said home sales continue to go well given low mortgage rates, and they expect a strong second half. Cadence gets some California buyers, but most are coming from the Henderson and Green Valley area, she said.

“Many of them are looking to move up and looking for a newer master plan and different amenities,” Gowan said.

Century Communities will start selling its first homes there by August. Toll Brothers has a new community that will open within a month. Richmond American has bought several parcels, and Woodside Homes has a parcel in escrow.

“DR Horton is also a new builder and will start building later this year and selling next year,” Gowan said.

Cadence also has American Homes for Rent, a builder that rents homes and started leasing its single-family homes in the spring. “They are still building out there, and we have 15 to 20 residents out there,” Gowan said. “They are slated to build 153.”

Skye Canyon

Pischke said with Skye Canyon rising up the ranks since the end of 2020, it will be interesting to see how 2021 ends for them, as well. Skye Canyon had a sales gain of 3 percent in 2020 compared to 2019, the lowest other than the decline in Inspirada.

In Skye Canyon, DC Graham, the chief marketing officer for the Olympia Cos., the original developer, which in early 2020 sold 400 acres but kept a marketing role, said it was a good first six months for every master plan in Las Vegas.

“We continue to be happy with how the growth of the commercial side happened in Skye Canyon,” Graham said. “We have a lot more shopping alternatives than a year ago, and that’s helped with homebuyers’ decisions. And I think the lifestyle and amenities (including the fitness center) are starting to take hold and proximity to the outdoor lifestyle.”

Graham said it’s helped that Toll Brothers has had a bigger footprint this year after opening in the fall. It had one community in late 2020 and had three open this year, he said.

“Having a greater presence from Toll changes our makeup a little bit,” Graham said.

The other builders in Skye Canyon are Woodside, Pulte, Century Communities and Beazer Homes.

Graham said the first quarter was stronger than the second quarter and expects the second half of the year to be robust.