It is a brisk but sunny afternoon in Las Vegas, and Stan and Pat Siegel are taking a rest in the kitchen of one of four houses they are viewing as part of their quest to buy a new home.
Standing on a quarter of an acre in the Red Rock Country Club, a gated community to the west of the desert city, this sand-coloured, single-storey building has taken their fancy. It has four bedrooms, a three-car garage, views over the development’s golf course and, of course, near year-round poolside living.
“We are tired of the snow and ice,” says Stan, a retired ear, nose and throat doctor from Jackson Hole, Wyoming, where spring temperatures often plunge below 0°C. “The only ice I ever want to see again is in a drink.”
The Siegels, who plan to spend $1m after selling their 4,000 sq ft home in Jackson Hole for $3m, are benefiting from a housing market that is a long way off its 2007 peak: average prices per sq ft in Las Vegas reached about $150 at the end of last year compared with nearly $200 before the US recession more than a decade ago, according to the real estate research company SalesTraq.
Before the crash, Las Vegas was one of the most active residential property markets in the country, its success fuelled by the city’s famed leisure and entertainment industry, the fastest-growing population in the US, plenty of available land and a construction sector that, back then, accounted for about 12 per cent of all local jobs — more than double the national average.
That cocktail turned it into one of the few cities left in the US that still held the promise of living the American dream. As blue-collar jobs disappeared from the country’s traditional industrial heartlands, Las Vegas offered plentiful employment and affordable homes without the need of a college education.
“It was on fire,” says Brian Gordon, SalesTraq’s principal. “You literally had construction workers building houses for construction workers. Then the music stopped.”
When it did, the city that had long promoted itself as the entertainment capital of the world suddenly took on a new moniker: ground zero of the US housing crash. Row after sprawling row of Spanish-style homes that had sprung up in the middle of the desert in the first years of this century saw their market value bleed away. Average per sq ft prices in the resale market plummeted from about $190 at their peak in March 2007 to just over $60 by January 2012.
In a matter of months, Las Vegas became America’s foreclosure capital, with one in nine homeowners in the throes of losing their property. It kept that unhappy title for two consecutive years.
Today, sales of new and existing homes in Las Vegas are on the rise again as the US economy gathers pace. Sales in the city’s high-end market are recovering, with 376 closings of existing single-family homes priced at $1m and above last year compared with just 152 in 2012, according to SalesTraq.
Sales of new homes are also growing strongly: last year saw 129 closings on properties of $1m or more, 34.4 per cent higher than the previous year. In 2013, there were just three.
Real estate brokers say many buyers in this segment are looking at properties in master-planned developments such as the Siegels’ favoured Red Rock Country Club. A four-bedroom house in the nearby gated community The Ridges is on the market for $3.5m with Berkshire Hathaway HomeServices Nevada Properties/The Ivan Sher Group.
Perhaps the clearest sign of the returning confidence of Las Vegas’ high-end property market is the Summit Club, a joint venture between the Howard Hughes Corporation and Discovery Land Company. Sitting on 555 acres of land some 10 miles west of the city’s casino-studded strip, the smart gated community boasts a top-tier golf course, huge clubhouse, tennis courts and a host of other amenities.
The development offers a range of properties including 1,200 sq ft clubhouse suites and 3,200 sq ft, four-bedroom golf cottages. It also has 136 custom lots ranging in size from half an acre to 2.5 acres and priced at between $2.5m and $8m. Including construction costs, some of the finished homes will cost more than $10m.
“It’s raising the level of homes being built in the Las Vegas market,” says Fafie Moore, a real estate broker and owner of ERA Brokers.
Summit says that it has sold about half the custom sites in the two years since it began offering them, and expects to sell the remainder over the next two years. Construction is under way on seven of the lots, with another 14 in the design approval phase.
Moore says the prospect of rising interest rates this year could temper the ongoing recovery of lower-priced housing in the Las Vegas market, with each percentage-point rise reducing people’s purchasing power 12 per cent.
But she does not expect that to affect the high-end market, where she says that many of the sales are going through as cash-only deals. “People want to have a home in the sun and they are drawn by the amount of property you can get for your money.”
- Direct flights link Las Vegas to New York in 5 hours, London in 9 hours and 50m and Beijing in 13 hours 5m
- There are no restrictions on foreign buyers
- Las Vegas falls within Clark County, where the average effective property tax, levied annually, is around 1 per cent; there is no personal income tax in Nevada
What you can buy for . . .
$250,000 A five-bedroom house in Winchester, 15 minutes drive from the Strip
$3.5m A four-bed, 32nd-floor penthouse apartment overlooking the Strip
$12m An eight-bedroom home with private cinema in a master-planned gated community in east Las Vegas
More homes at propertylistings.ft.com
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