Three-Story Homes Becoming Common Sight

As land prices rise and available terrain shrinks, residential developers are taking a page from the books of cities like Chicago and New York and are building up rather than out.

Close to a half-dozen homebuilders are now trying their hand at three-story homes in Southern Nevada, according to Dennis Smith, the president of Homebuilders Research. He sees it as a logical step. "Builders will face more challenges with density and land prices, and with all these public builders, they can go out and scour the countryside for ideas from other cities. Smaller builders will follow suit," Smith added. "If they are affordable, why would people not buy them?"

ASTORIA HOMES President Tom McCormick was at the forefront of the trend. He began building his first three-story homes in late 2005, as part of its 1,254-home Tapestry development in Centennial Hills. At build-out in late 2007, some 150 to 200 three-story residences will be included in the three-neighborhood project. Those three areas will be called the "Lanes," "Avenues" and "Courts." Of those, the 480-home "Lanes" neighborhood will include the tri-level product. A few three-story model homes are open for viewing. "The real challenge is that the land price is so high that we are seeing what we can do to keep it down on a per-home basis," McCormick explained.

STRONG DEMAND
To date, the response has been positive. "They are selling quickly," McCormick maintained. So strong has been the demand that the developer is the process of making plans for his next development -- "Hillside," in the Lone Mountain area. That community will have 371 homes of which 150 to 200 will be three-story products.

In the case of ASTORIA, buying a three-story home can give the homeowner more bang for their buck. A single-story, 2,100- to 2,200-square-foot home in Tapestry would run about $400,000, but a comparably-sized three-story home costs about 25 percent less because smaller lots are used, McCormick noted. The high-end of pricing for the three-story homes runs about $324,000. "Doing this, we knew it was risky, but we have been pleasantly surprised," he admitted, "because it does offer a lot for the money. We have plenty of people waiting for the three-story homes."

In March, the median price for 2,521 homes sold during the month was $314,950, up 6.8 percent from the same month a year ago, according to the Greater Las Vegas Association of Realtors. The continued upward climb in home prices has led to more builders looking skyward in single-family developments.