LAS VEGAS -- News, notes and tidbits from the 2013 International Builders Show:
-- We have emerged from the Valley of Death. National Association of Home Builders’ chief economist David Crowe showed a graphic that illustrated how national home prices, which have been falling off a mountain and them bouncing across the desert floor, are starting to climb the next mountain. Nationally, prices peaked in April 2007 at nearly $230,000 before falling to just over $180,000 in October 2011. Since the start of 2012, prices have been climbing, at an annualized rate of nearly 6 percent.
-- Household formations are on the rise. Other than employment, which also is gaining, more people are starting households, if not families. From 2007 through 2010, just a half-million households were begun each year. Now we are seeing 850,000 homes being formed over the past year and a half. Households need houses, so that is good news for the housing industry – both builders and Realtors. From 2002 through mid-2005, about 1.38 million households were formed each year.
-- The three types of residential construction – remodeling, houses and condominiums/apartments/villas – are seeing improvement at roughly the same pace. Crowe expects the construction of apartments and houses – “housing starts” – to increase by a little of 20 percent each this year.
Multifamily (apartments/condos) housing starts fell 76 percent from early 2008 through the middle of 2010. Single-family housing starts fell 80 percent from eary 2006 through early 2009, and are back to 44 percent of “normal,” said Crowe.
-- For nearly two decades, the National Association of Home Builders has constructed The New American Home, a new one of which is unveiled at the IBS each year. These houses tend to be rather large, mostly because so many product manufacturers want to donate products to be displayed in them that more space is needed to accommodate the demand. This year’s house in Las Vegas has 6,700-square feet. Not exactly a typical new American home. But explained the NAHB’s Tucker Bernard, “This is the showcase of leading products. If the product is used in this house, you can go out and buy it. It doesn’t matter if your market niche is $150,000 or $10 million. This is an idea home. Builders can say, I can use this (product) in my market niche.” But there’s another reason for the extraordinary size, said Bernard. “If this were a 2,000-square-foot home at $150,000, who would come and see it?”
-- Maybe it is just me, but people in the construction industry are getting to look as if they are fresh out of college. Tyler Jones, who built The New American Home, is a youthful 35, and architect Michael Gardner is a 34-year-old with nary a wrinkle nor a gray hair. Jones said he “grew up in the business. My father is custom-home builder. I got interested in architectural side of things and started working for architects at age 15. I studied arch at Colorado (University) and started company my in 1994. Design-build – we do it all.”
-- Jones calls the architecture of The New American Home “desert contemporary.” “More specifically, it is Las Vegas desert contemporary,” he said. “The climate here affords this type of lifestyle where you can have an indoor-outdoor connection. You can open the house and enjoy the outside. Most of this market is the quasi-Mediterranean or Tuscan.” Sounds familiar to Floridians, Tyler. “For me, it is dishonest – a wanna-be rip off of another genre that has no place in the desert. Vegas is a new city, so it is contemporary. It is a little bit over the top at times; we have fun. It is about entertainment.”
-- Entertainment is not cheap. The New American Home contains a dedicated closet full of components for the house’s audio, video and lighting systems. The dollar tag for that closet is $80,000.
-- The New American Home has one large swimming pool and a couple of wading pools that are so well-integrated into the design that they appear to be blue carpets at first glance. The pools are worth $280,000, said Jones. “The biggest challenge was integrating the water features into the home and having the water that close to the house’s structure,” said Jones.
-- The house will be open as a model for two years; Jones expects it will sell for about $4.5 million. “For people to buy a new home in today’s market, it has to be special,” said Jones. It took 10 months to plan and 10 months to build. Normally it would have been an 18-month build. It wasn’t easy. We had 100 people at the house on a daily basis, feeding them, the last 90 days of the project, including weekends.”
-- The gambling tables didn’t seem that full. And I made out better than almost every other “gambler” in Vegas: I bet a dollar and only lost a dollar.
