No, we’re not talking about the age difference between the new residents and the old ones. We are talking about the HUGE gap between the prices of new Las Vegas homes and old Las Vegas homes. The numbers are astounding and most likely quite telling as to why the new home market is neither attractive nor competitive right now.
Just to clarify, our definition of a new home is one that has been recently constructed and has yet to be owned or occupied. We randomly selected three websites of local new home builders. Here’s what we found.
- Builder 1: In the move-in ready section there is a 3300 square foot home in Nevada Trails for $372,100.
- Builder 2: In the standing inventory there are 2043-2522 square foot homes in Anthem starting at $169,490.
- Builder 3: In the quick move-in homes there are 2400-3039 square foot homes in Mountain’s Edge starting at $219,900.
As of today the median new home price is around $210,000. And here’s the kicker. The median previously owned home (old) price is almost half that amount, around $110,000. Wow! The gap in between is a gaping one. Even in 2006 when the housing market was in good condition, the gap was $43,000. It is no wonder that new home builders are downsizing or even closing shop. They just can’t compete.
What will it take for the gap to narrow? Well, most likely new home prices aren’t going to drop to the level of previously owned homes, but there will come a day when the old homes will rise back to a more realistic level, but that’s going to take time. Foreclosures and short sales will keep the prices low. Once those start clearing out, we will again see an increase in old home prices and that gaping hole will slowly become smaller.
