Builders Slash Prices to Sell New Homes in Las Vegas

Virtually every major builder in the Las Vegas valley has slashed prices to sell houses in a struggling market this fall.

Pulte Homes marked down prices 15 percent on certain models, with discounts of up to $80,000 on some completed new homes during one October weekend. The builder's Del Webb subsidiary sliced $55,000 from some homes.

Rhodes Homes has offered as much as $100,000 off on finished houses. Lennar Corp. has slashed prices on some models by about a
third; Lennar cut the cost of a 5,000-square-foot home in its Earlstone community from $911,490 to $662,490, and a 4,498-square-foot home in its Silver Creek subdivision went from $807,290 to $612,290.

Centex Homes has clipped $25,000 to $100,000 off the prices of some of its existing homes, and is giving away as much as $21,000 in closing costs on some models. American West Homes' valleywide "liquidation sale" on Nov. 10 and Nov. 11 featured savings of up to $143,000.

Builders say the price reductions are boosting traffic and clearing inventory.

After Astoria Homes dropped prices on standing inventory by as much as $200,000, or 27 percent, Oct. 12-14, traffic at least doubled across the board at Astoria communities, and even tripled in some cases, said Tom McCormick, the company's president.

The sale helped make October Astoria's best sales month since 2005. The builder averaged about four sales per neighborhood during its discount weekend, compared with an average of half a sale to a sale per week before the price cuts.

Astoria's available inventory dropped from eight weeks or 10 weeks of supply to around four weeks or six weeks. The sales are "sticking," too, McCormick said, with a cancellation rate of 10 percent, down from about 30 percent before the sale.

Pulte Homes had an "exceptional" weekend during its "Monster Sale" Oct. 19-21, said Nick Parks, the builder's local director of marketing. Sales doubled when compared with the four prior weekends.

"It's a new market, and you need to provide the consumer with new value propositions to be successful today," Parks said.

"There are people out there who need homes and want to buy homes, and I think our success with the Monster Sale demonstrates that there is consumer confidence in the market if they're provided the right value proposition.

"Generally, it's a positive indicator that the market isn't as depressed as some want us to believe."

Numbers from tracking and consulting firm Home Builders Research
show steady increases in new-home sales in the fall, as builders
intensified their cost cutting.

The local market moved nearly twice the number of homes during the week ended Nov. 11 as it sold the week ended Aug. 12, an increase Home Builders Research President Dennis Smith attributed to widespread, continuing sales.

Companies that haven't held or advertised sales are not reporting significant increases in purchases.

D.R. Horton, which hasn't publicized any sale-price reductions, has 42 local new-home subdivisions and posted net sales of just four homes in the week ended Nov. 11 and two homes in the week ended Oct. 14, Home Builders Research found.

Despite total traffic through models of between 500 and 600 people weekly, Toll Bros., a luxury builder that also hasn't marketed any discounts, had zero net sales in the week ended Nov. 11 and a negative net-sales rate of two homes in the week ended Oct. 14.

Information from: Las Vegas Review-Journal,

(Copyright 2007 by The Associated Press. All Rights Reserved.)

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