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April 30, 2004
SPECIAL REPORT BoomtownFRENZIED PAHRUMP REAL ESTATE MARKET SETTING RECORDS FOR LAND, HOME SALES
By MARK WAITE
Hafen, a longtime Pahrump resident, said there were more than 300 requests to join the lottery for 115 lots. Each bidder had to submit their name and address, along with a $1,000 deposit check. "On phase II we were sold out in February and before Phase III was recorded and ready to sell we got lots of requests from people saying save us a lot," Hafen said. "We didn't know any other fair way of doing it. If you tried to do it on a first-come, first-serve basis it wouldn't work too well either." The Artesia lots came ready to build with water and sewer services, and paved streets. Hafen said he's noticed the lot prices rising during each phase, from lots in the $42,000 to $54,000 range for Phase II to prices of $60,000-70,000 in Phase III. "It took us two years to sell the first 178 lots. Then it only took us 10 months to sell the next 199 lots. Then we come across to Phase III and we had a lottery," he said. Hafen said there are already 200 people interested in Phase IV of Artesia, with over four months to go before the lottery is held in September. The Pahrump Valley is seeing the local equivalent of the Oklahoma land rush, with sales of property and land prices going up, up and away over the last two months. Real estate industry professionals describe the price of lots doubling, of prospective homebuyers competing to buy a house, bidding up the price. Roger Saltzman, a realtor with Realty Executives, said what Pahrump is seeing now is a spillover effect from Las Vegas, where homes are increasingly hard to find, or are less desirable. "Business is good but it's very hectic. I mean, gee, we'll look at some (homes) on the market in the morning, and get a customer to go and show it and by the time we get back to the office it's already sold. We've had dual and triple offers. The stories you hear about Las Vegas, the trickle effect, is here now," Saltzman said. "Today, full price is pretty regular. Then when you get into multiple offers it's overpriced," he added. Nancy Grant, a real estate broker with Pahrump Realty, said she's also staying "tremendously busy, just like everyone else in town." While the price of 1.25-acre lots may seem to have escalated dramatically for Pahrump residents, Grant said many of the buys are still a bargain compared to elsewhere. "A lot of the properties have doubled in the last three, four months," Grant said. "In the more popular areas, lots that were selling for $25,000 a year ago are now selling in some places for $48,000 to $50,000." Grant said even un-buildable lots are selling. People feel they will be able to build on them in the future, she said. "I wish I had another 100 lots to sell and more time in a day," said real estate agent Cathy Slaughterback, owner of All-Star Realty. She said homebuyers from California inundated Las Vegas, which couldn't keep up with the demand, and many buyers are now overwhelming the Pahrump real estate market. Slaughterback said she has a waiting list of applicants wanting homes. "I have a list of people and they're mostly looking for Calvada Valley lots they can build on," Slaughterback said. "They just want nice homes around them. They want 2,000 square-feet-plus homes." Home prices are up to $100 per square foot, she said, adding one of her agents listed a home in the Vineyards subdivision for $143 per square foot. "I sold a $425,000 five-acre property in two days and never put a sign on it or put it on the market," Slaughterback said. She described getting a listing for a small manufactured home Tuesday afternoon and selling it that same night. However, she added the prices on the manufactured homes aren't rising as fast. Van Dishong, owner of the Pahrump Re/Max Realty Company office, said he figures the crush began in January or February. "Since then, as of right now we're going to double ourselves compared to last year. I mean we've already done almost as many transactions up through today's date as what we did last year," Dishong said. "I think one of the biggest things is Vegas has run out of inventory. But Pahrump is quickly headed in that direction. But the good thing is a rise in house prices. We're getting to where we should've been," Dishong said. While real estate professionals have been lamenting a lack of listings of property for sale, Dishong said that could change. As home prices go up, more people will be tempted to sell. Dishong predicted that in six to eight months there wouldn't be manufactured homes for sale under $100,000 or stick-built homes for under $180,000. Dennis Smith, president of Homebuilders Research Inc., said the median price of a new home in Las Vegas in March was $225,813, up 20.4 percent from last year, making that home cost $38,278 more. Home Builders Research Inc. tallied 2,769 new home sales in the Las Vegas Valley in March, bringing the total so far this year to 7,076 homes sold, an increase of 36.4 percent over the first three months of 2003. Donna Lamm, a real estate broker with Provenza-Neth Properties, said she wouldn't call it a surge in home buying lately, more of a "shock wave." "I'm having trouble finding buildable acre or half-acre lots that are available and the prices are definitely going up. The other thing I'm experiencing, I broker water rights and it's difficult to get water rights. I'm getting calls all the time," Lamm said. "If they're subdividing or parceling land they can't do it without water rights." Lamm traces the current real estate frenzy to the sale of U.S. Bureau of Land Management property in Las Vegas Valley last year, in which prices were unusually high. "The developers ran the price up so they could still build houses. A lot of the same guys are over here looking," Lamm said. Jeff Meads, president of Classic Homes, also mentioned large-scale developers buying up large tracts of land in Pahrump. He described the real estate situation as unreal this year. "We've attracted a whole new market with these bigger developers coming from Las Vegas and California," Meads said. As for his company, Classic Homes remains one of the busier construction companies in Pahrump. "Last year we did 67 homes according to the building and safety department. We've already done that many this year. We're on track to do 150 homes," Meads said. That's even with a delay in the start of the Cottage Grove Estates subdivision. Classic Homes sold over 60 lots in the Floyd Farms subdivision in two weeks, Meads said. He attributed part of their success to the fact their lots have access to water and sewer utilities, noting many people are buying land now to live here, not just as an investment. "One of the biggest problems is utilities. There's a lot of land but not a lot of buildable land," Meads said. "Everything we had in inventory that had the capability to be built on in the last two months is all sold out. "Every week there seems to be a new benchmark. It just goes up." "We're selling homes and writing contracts for anywhere from $150,000 to $420,000," Meads said. While the rush is on now, some real estate professionals feel land sales would slow down if interest rates rise, others didn't feel it would have much effect. But they mentioned other possible limiting factors. Hafen said if interest rates rise dramatically that could slow the housing market, making mortgage payments too high for some people to qualify. But he added, "I think people have the idea that an investment in land is good because you almost never lose money in land." Lamm pointed out another factor that could limit growth that's more important than fluctuating interest rates: water. "That's what's going to ultimately determine how much this area grows is the water rights, because we're in a closed basin, we don't have Lake Mead next door," she said. Mike Cosgrove, project manager for the Mountain Falls development, said he's had a lot of inquiries, especially after Hafen's lottery. Mountain Falls was originally intended to contain over 8,000 homes; a master plan has been redesigned with 3,200 residential lots. Asked when that project would take off again, Cosgrove said, "We are definitely working with a major company to move ahead. So it can happen at any time." And other activity is popping up. Cheryl Beeman, assistant director of the Nye County Planning Department, said one developer submitted plans for a subdivision with 640 lots between Thorne Drive and Bond Street in the far southern part of the valley. |
