Las Vegas builder earns Developer of the Year honors

The green housing movement is making further gains as the consumer is becoming increasingly aware of how valuable its contributions are to the reduction of energy consumption and greenhouse gas generation. Concordia Homes, a Southern Nevada builder for years, was recently recognized by Las Vegas Business Press as the Developer of the Year in the green building category.

Concordia has for a long time produced homes using Energy Star guidelines, but then it reached a point where it felt it needed to do better than that. Energy-savvy home buyers were looking for more and it wanted to respond, so when it launched the Sommerset Community in Henderson, Nevada, it was going to go another step or two beyond Energy Star. As a result the signature equipment at the 48-unit development turns out to be the roof-based solar system installed in every home as a standard feature.

GE is the manufacturer of the system that it calls Energy Brilliance. It blends rather well with any roof and offers several years of maintenance-free operation. On the technical side, it’ll produce about 4,400 kilowatt-hours of energy each year. During low-consumption periods in the day the system will usually manage to feed power back into the electric grid, instead of taking from it. Wouldn't it be satisfying to watch the meter run backwards for a change? Especially in Las Vegas with plenty of sunny days, that’ll probably happen quite often. And that then translates into actual dollar savings to the homeowner.

Sommerset homes also come with a GE SmartCommand Envirodashboard, that’s a long one, that actually is an interactive display that keeps homeowners apace of their current and past power and water consumption figures. It can be useful in pinpointing areas where possible waste is occurring.

There are other improvements besides these incorporated into these homes and altogether they add from $20,000 to $25,000 to the price of houses there, which are priced from $295,000 to $339,000. Yet, according to Concordia’s estimates, the real-life energy savings will quickly make up for the cost premium. Well, sure, if the meter runs backwards, that'll do it.

Las Vegas land prices soften up, except on resort corridor

The way the residential real estate market today is going in Southern Nevada it's no surprise that raw land values here are heading south. Demand for land is way down as the housing sector struggles with a large inventory of new and resale homes. Even if a builder wanted to purchase acreage for a project, getting financing now would be a challenge in this lending environment. The slowing economy doesn't help much either.

In the second quarter median vacant land price stood at $570,279 per acre which turns out to be $148,232 less than at the same time last year, or a 21% decline, reports Applied Analysis, a local market research firm. The frenzied speculation of a few years ago has come to a stop and actually reversed course. Prices are now somewhere near where they were about three years ago.

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Southern Nevada luxury market under pressure now

All along it has looked as if the general real estate slowdown here in the Las Vegas valley would leave the high-end segment largely unmarked. Mortgage lenders felt confident for a long time about the viability of the luxury market and kept underwriting loans here for those who needed them. Many, of course, were able to close a purchase by bringing in a sack of cash and that was it.

The outlook has changed, though, quite a bit in the last year or so. The segment has slowed down considerably and is now going through the same type of adjustment that the rest of the market started couple of years ago. The evident overbuilding, the tighter mortgage environment and the slow economy are now adversely touching on it.

SalesTraq, a local real estate research shop, reports that sales of single-family homes and condominiums going for over $1 million nosedived during the first half of the year. 161 homes were closed during the first six months while at the same time last year there were 343 closings. That is a serious decline.

For one thing, it's all over town that mortgage banks have gradually tightened underwriting guidelines overall, including in this segment despite the fact that many of these buyers are financially well-established. Las Vegas being a resort destination, over a third of these high-end purchases are second homes and if the luxury condo end of it is taken alone, the percentage is even higher. Today, anything outside primary residence status is a touchy subject to investors buying mortgages.

Price stability also plays a huge role in this. There are several prominent condo projects here with names like Turnberry Place, Trump and MGM Mirage's Signature that commanded nice prices early on. Now those value levels are eroding as more units enter the market, either as resales or new, while demand is waning. Not surprisingly, lenders are taking a cautious approach to all luxury mortgage applications hitting their desks. And not only lenders, but buyers, too, will take another look at the potentially unfavorable price movement before making a commitment.

Las Vegas second home buying could be affected by new housing bill

The mammoth recent housing bill has gazillion provisions in it, covered in detail on about 600 plus pages of fine print. There is the potential mortgage refinance assistance for those in payment distress, there is the tax credit for first-time homebuyers who qualify and so on. Lots of material that when all of it is implemented and working in the months ahead it is expected to provide a helping layer of stability to the still wobbly mortgage and real estate markets.

One of the new stipulations touches on vacation properties and it can have an unknown effect on Las Vegas where a good portion of single-family homes and condominiums are purchased as such. In short, owners of these are going to lose the capital-gains exclusion when they are sold. During the last decade or so owners did qualify for the $250,000 - $500,000 for couples filing jointly - profit exclusion as long as they played the game of moving from a primary residence to a second home to another principal residence to comply within existing tax laws. But that sort of profitable hopping around will be over soon.