Homebuilder hopes for an improving market

Homebuilders have yet to recover from a tough 2006 that required many to offer large incentives to get rid of their inventory. Staffs were pared and building permits were cut drastically because of softening demand.

But with the change in the calendar, builders are pressing ahead with the Las Vegas Valley's next wave of master-planned communities in Henderson and North Las Vegas. And for one area builder, flexibility will be important in meeting future demand.

Last week, the Olympia Group, developer of Southern Highlands, kicked off development of Park Highlands in North Las Vegas. When completed, it will have nearly 16,000 homes.

Astoria Homes plans to complete homes for opening in 2008, said Tom McCormick, the company's president. He said he's optimistic demand will return by then - something housing experts have predicted because of the low inventory of new housing in the Las Vegas Valley.

No builder has inventory left, including Astoria (20 at its most recent count), and builders have cut back production, McCormick said. He said it won't be long before there is a waiting list for apartment complexes. Everything points to a quick turnaround because there is not enough supply coming to the market.

"We are very optimistic about what is going to happen," McCormick said. "I think 2006 was more or less a hangover of the exuberance of 2004 and 2005. With strong job growth and population growth and a lack of land, we see things improving. That's what we are planning for."

The large inventory of existing homes has kept many from purchasing a new home, but that inventory appears to be falling as sellers are more realistic about the prices they can get, McCormick said.

"It is pretty obvious that some people are unrealistic even in the best of times," McCormick said. "If homes are properly priced, they will sell."

McCormick said Astoria, which built in nearby Aliante, will build somewhere between 1,000 and 2,000 homes by the time Park Highlands is built out in the next 10 to 15 years. Despite their plans to press ahead, McCormick said it's too soon to speculate on Astoria's products or prices in Park Highlands.

McCormick said it's important to monitor the market and Astoria will adapt to those changes, including mixed-use projects. Flexibility is important, and if some product comes out that is hot and new, Astoria can build it, he said.

"I think we are going to see brand-new products and stuff people have never seen built out there," McCormick said. "We are going for what the demand is, and we are always looking to be different from our competitors."

In other news:

Ken Simonson, chief economist for the Associated General Contractors, said there's no indication there will be a let-up in commercial construction across the country. He said energy and power-related construction, hotels, hospitals and rental housing will perform well while single family and condo construction will deflate the totals.

Desert Communities, an affiliate of Rhodes Homes, was the successful bidder at the Arizona State Land Department auction for 1,010 acres of state trust land in South Apache Junction in Pinal County. The bid was $58.6 million. As the winning bidder, Desert Communities is required to master plan all of Lost Dutchman's 7,700 acres of infrastructure and transportation.

Alliance Residential Co., a Phoenix-based multifamily real estate company, said it has partnered with AEW Capital Management to acquire 15 apartment properties totaling nearly 4,000 units in Las Vegas, Phoenix, Tucson and Albuquerque. The Las Vegas complexes in the acquisitions are Talavera at Peccole Ranch, Pinnacle at Flamingo West and Desert Lakes.

JVC Architects said it has contracted to design a multipurpose building for Northgate Christian Church in North Las Vegas. The 22,000 square-foot $2 million project is scheduled to be completed in the spring 2008.

A groundbreaking ceremony will be held today for a health care facility for low-income and homeless children attending the Cynthia Cunningham Elementary School. TWC Construction is partnering with the Burns Family Trust. A similar project was done at Reynaldo Martinez Elementary School. The facility is for children who otherwise wouldn't have access to medical and dental services. The clinic adjacent to the school will be open in the spring.