The Hoffman Company closed $30.2 million in Las Vegas land transactions in the third quarter, a result of increasing construction and new home starts in the depressed housing region but also legislation that made it more difficult for banks to foreclose.
The Irvine, Calif.-based land brokerage firm completed seven deals in July through September, including the sale of 144 lots in the southeast suburb of Henderson. Hoffman also reported sales of 83 lots in Lone Mountain on the west side and 38 estate lots in northwest Las Vegas.
“The story is that new home sales have picked up; you’re seeing pricing going up a little bit, and you’re seeing absorption go up,” said Hoffman’s Aman Lal in a statement. “It seems like the market has found some stability and home buyers are more confident to go out and make a purchase.”
The number of foreclosures on the Las Vegas market dropped dramatically from 2011 to 2012, reducing housing inventory and helping fuel the demand for new construction.
That demand, however, has been buttressed by legislation known as AB284, or Nevada Assembly Bill 284. Enacted in October 2011, the law added stricter requirements to Nevada Foreclosure Law in an attempt to protect homeowners.
New home starts in Las Vegas are on track to top 6,000 this year, nearly double that of 2011. Nevada housing has been the hardest hit market in the nation for the past five years. The market peaked in 2006 when 45,000 homes went under contract. In 2010 sales plummeted to 5,000, and in 2011 they fell even further to 3,500, Lal said.
“New home sales have almost doubled in 2012, and builders have burned through their inventory, so the pressure is on to buy land and deliver new homes,” he said. “Lots of people think 2009-2010 was the bottom, but it was really in 2011.”
Hoffman opened its Las Vegas office in 2008 — the start of the U.S. economic downturn.
AB284 has kept many foreclosures off the market, meaning new home builders have not had as much competition. If the legislation is amended and floods the market with foreclosures, new home pricing could stall, Lal said.