Housing Jackpot

After living for 14 years in Woodland Hills and five years in Thousand Oaks, Bert and Phyllis Zimmer wanted to retire someplace else.

“My husband thought it was just too expensive to live in California as a retiree,” she said, “so we looked, but only for a couple of months, because we made up our minds early where we wanted to be.”

They chose Las Vegas.

“We enjoy the night life, and Las Vegas is close enough to go back to California to see our grandchildren,” she said. “Anywhere else that we both liked was either too small a town or too far away.”

“And we were able to get a bigger house than we had in California for less money,” her husband added.

They sold their 5-year-old, 1,900-square-foot house in Thousand Oaks for $350,000, and last October, bought a new 2,460-square-foot house in Las Vegas for $165,900.

The Zimmers aren’t alone in selling a home in California to buy one in Las Vegas.

A third of the new houses in the Las Vegas area are being purchased by Californians, said Glen Barton of the Meyers Group, an Encino-based marketing research firm with an office in Las Vegas.

And in some tracts, as many as 90% of the new homes are being sold to California buyers, an informal survey by a Times reporter showed.

The migration has been occurring for several years now, contributing to a housing market that has had no letup in sales amid slowdowns elsewhere.

Many folks who have moved to Las Vegas are retirees who have turned the city into one of the largest retirement communities in the nation, according to real estate analysts.

But retirees aren’t the only buyers who have fueled the Las Vegas market. Pre-retirees and other investors, job transferees, job seekers and people simply seeking a different lifestyle have also been coming to Las Vegas.

And so have real estate developers.

At last count, there were 96 of them selling homes in about 140 Las Vegas subdivisions, about 40% of those tracts in at least 21 master-planned communities.

About a dozen of the developers also build in California, including two old-timers to the Las Vegas market that are based in California: Pardee Construction and Lewis Homes.

And more developers and home buyers from the Southland are headed for the Silver State, analysts say.

The reasons are many, not the least of which is that a new condo can be bought in Las Vegas for as little as $50,950, and new detached homes cost about half as much as they do in Orange County.

David Marriner, vice president of sales and marketing for Newport Beach-based Orange Taylor Woodrow Homes, said, “You can buy a nice home in Las Vegas for $80 a square foot, and you’d have to pay $150 a square foot for the same house in Orange County.”

“The major market for single-family homes in Las Vegas is $130,000 to $180,000,” said Barton of the Meyers Group.

“But one of the big draws of Las Vegas is its quality of life, which includes an affordable lifestyle, not just in terms of housing,” said Randall Lewis of Lewis Homes of California, an Upland builder with a subsidiary that has operated in Nevada for 30 years.

There is no state income tax in Nevada, and residents there say utilities, eating out and other entertainment costs less than in California.

“People perceive Las Vegas as having a good climate, good schools, better traffic than other cities and lots of shopping,” said Lewis, executive vice president of the family-owned company.

New residents are also drawn there by the availability of jobs, gaming and other recreational activities.

Rick and Cheryle Hall, both in their 30s, moved from Corona to Las Vegas because of its proximity to Lake Mead.

“We’re water-skiers,” he said, “and we have a 17-foot Sea Ray (boat), which we took there every other weekend.”

His wife got a job with a Las Vegas mortgage broker before they moved, and he figured he’d get one in construction as soon as they got settled.

They bought a house for $180,000 in Villa Trinidad at the master-planned Painted Desert. Villa Trinidad, now in its first phase, is a 122-unit development of Sunland Communities, based in San Diego.

Other builders cited nearby snow skiing as another reason for the influx of new Las Vegas residents.

The population of the Las Vegas area, now at about 730,000, is growing an average of 5,000 people every month, said Keith Schwer, a professor in the Center of Business and Economic Research at the University of Nevada, Las Vegas.

A third of the immigrants come from California, he added.

Californians are increasingly attracted to the homes being built in Las Vegas “because there are more master-planned communities in Nevada now like ones in California,” said Harvey L. Goth, executive vice president of the Bergheer Co.

Bergheer is a Newport Beach-based builder that is just beginning move-ins on its first Las Vegas project, a 195-unit development of townhouses and patio homes in master-planned Desert Shores.

“The master-planned communities have architectural committees, so you know what you are buying, and you know what will be built next door to you. You won’t look up and see a casino or shopping center being built there, as you might have in the past, when there was strip and spot zoning in Las Vegas,” Goth added.

“There are more planned unit developments in Las Vegas now with themes, like The Lakes or Desert Shores, and Californians love that,” said Chip Johnson, a Las Vegas land broker with Real Estate Services Group.

Many of the themes are water related, with lakes and waterfalls, and the source of that water has become a desert issue.

“Desert Shores will be the last Las Vegas project to use potable water,” said Robert J. Moynier, vice president of the Bergheer Co., “but there will be lakes and water for golf courses and landscaping in all of the master-planned communities coming up, using secondary, treated water.”

The 2,245-acre master-planned project known as Lake Las Vegas, in nearby Henderson, will be centered around a 300-acre man-made lake, using water from Lake Mead.

But themes of Las Vegas master-planned developments vary almost as much as sizes, which range from the 300- to 400-acre Whitney Ranch to the 25,000-acre Summerlin.

Housing prices are equally diverse, from $150,950 for a detached home at Pardee Construction Co.’s Spring Valley to $540,000 for a mini-mansion at Spanish Trail.

Spanish Trail, master-planned by Las Vegas developer Joe Blasco Sr., earned the Gold Nugget “Home of the Year” Award last year at the Pacific Coast Builder’s Conference.

Spring Valley started in 1970 with about 1,100 acres and was the first master-planned project in Las Vegas, said Ray Landry, assistant vice president of a subsidiary of Los Angeles-based Pardee.

The latest master-planned project to be announced is El Dorado, 7,500 acres released by the Bureau of Land Management to the city of North Las Vegas.

“We’ll be the initial ones to build there, based on our history in Las Vegas,” Landry said. Pardee has been building homes in Las Vegas since 1952.

A number of developers, including ones that are new to the area such as Ray Watt of Los Angeles, are expected to follow.

But Las Vegas is already hot for builders.

“There is so much building going on, it’s hard to get good subcontractors,” Lewis of Lewis Homes said.

Dennis L. Smith, who tracks building permits and escrow closings for his Home Builders Research Inc.’s monthly newsletter on new Las Vegas housing, said:

“As we did in ‘89, we are continuing to average 800 to 900 new single-family home sales per month, so we’re right at the tail of San Diego. It has about 1,100 sales a month, but it has twice our population.

“Riverside County, which is the No. 1 or No. 2 housing market in the country right now alongside Seattle, is doing about 1,800 home sales a month.”

But the Hotness Index, a national study conducted by Detroit-based U.S. Housing Markets that watches population growth and building permits, ranked Las Vegas No. 1 for the past two years, Smith said.

In its February report, U.S. Housing Markets termed Las Vegas “the busiest market in the nation on a per-capita basis,” having pulled more than 40 residential permits per 1,000 population. That is “far above the country’s second-hottest market, Ft. Myers-Cape Coral,” Fla., the report noted.

In his January newsletter, Smith wrote:

“The 9,742 sales in 1989 was a 54% increase from the 1988 total of 6,314 sales. Interestingly, our count of 11,095 single-family permits in Clark County (Nev.) was also a 54% increase from 1988 figures.”

Alfred Gobar, a real estate consultant with offices in Brea, Calif., says builders have been constructing, on a yearly basis, 24,000 to 25,000 housing units--of all kinds--in the Las Vegas area, and the number is about the same for residential building in Orange County, which has a larger population.

Using Smith’s statistics, Steve Gunter, a Las Vegas land broker with Bill Hammons & Associates, noted that during 1989, the number of subdivisions dropped from 174 to 150, while the number of monthly recorded sales doubled, from 519 in January to 1,128 in December.

“The No. 1 reason for this was demand; the subdivisions sold out,” Smith explained. “We had more demand than supply in 1989.”

“This is what is attracting the California builders,” Gunter said.

“You’ll see more California builders coming here in the next six to eight months because of the housing slowdown there, though it’s still a good market in California compared to most other states,” predicted Barton of the Meyers Group.

“More builders will also come here from there, because it’s a natural extension for a California builder with Las Vegas being only a 5 1/2-hour drive away.”

Besides geographical proximity and buyer demand, relatively cheap land and few regulations in Las Vegas also draw California builders.

“From a Southern Californian’s standpoint, all of the jurisdictions here are easy,” said Scott Smith, Southern Nevada manager of Taylor Woodrow, which just opened operations in Las Vegas.

“Getting permits to sell are almost over the counter here,” said David Marriner, vice president of sales and marketing for the firm. “It takes four to six months to get a white slip in Orange County, but it only takes a week here at most.”

“It’s like Orange County was 20 years ago,” Smith added.

Similarly, land costs are low by California standards, though Las Vegas acreage has jumped in price by 33% in less than a year, according to Larry D. Canarelli, president of American West Development, a Nevada firm.

“A year ago, you could buy a finished lot in the best areas for $32,000, but now it would cost about $44,000,” he said.

“The bargain prices are gone,” said Frank L. Nason, marketing director of the Schulman Group, which started in Southern California but moved to Las Vegas several years ago.

“Two years ago, you could buy raw land in North Las Vegas for $15,000 an acre. Now you must pay $40,000. And I bought a house 18 months ago that has probably appreciated 15%.”

Raw land in California costs far more.

Moynier of the Bergheer Co. said he has been negotiating to buy 100 acres of waterfront property in Ventura for $350,000 an acre. “Of course, that’s prime land,” he explained, adding that it is possible to buy land elsewhere in the California for $75,000 to $100,000 an acre.

Las Vegas real estate is rising at a rate at which buyers can adjust, particularly since the market is being driven by the out-of-state buyer, primarily from California, Canarelli said.

“He can make big payments,” he remarked. “It’s nothing to him.”

And so far, any slowdowns in the California market have had little effect on Las Vegas, from what builders in Nevada say.

“We’ve only had two of 1,200 homes sold here that have had problems with the buyers selling their homes in California, but if the market really went bad in California, that could slow us down,” said Ed Southard, vice president of sales and marketing for Del Webb’s Sun City Summerlin.

An estimated 55% of the buyers there are from Southern California.

At Sun City, “an active adult community,” one of the buyers of every home must be at least 55. But many of the home buyers at other new tracts are also retirees or pre-retirees.

“Some buyers are speculators who figure they won’t retire now but will in a couple of years. So they’ll lease out the house for two years,” said Jim Slama, a broker working with builders through New Homes Sales Inc.

Even at Sun City, there is a mix of buyer types. Besides retirees, there are second-home buyers, investors, people who work in Las Vegas, and others who work in California and commute.

One fellow who lives in Sun City Summerlin works in Burbank and flies there from Las Vegas every weekday, Southard said.

But most buyers at Sun City are like retirees Jeannine and Leo Hinkel, who sold their house in Oxnard and moved to Sun City when the development opened a year ago.

“The lifestyle here is fun,” she said. “We enjoy the gaming. We like the lounge shows, which you can see for the price of a drink, and dining out, which can be inexpensive.”

She likes to swim and helped form a swimming club at Sun City. He likes to play golf there.

“I was driving my golf cart, looking at the view and said, ‘I’m glad we live here,’ ” he remarked. They also have a red Volkswagen convertible, which they like to drive with the top down when the nights are warm.

“I loved the beach in California, but I don’t miss it,” he said. “The mountains here are hypnotizing,” she said. “I gaze at them. I paint them. They’ve become our beach.”

Thanks to the affordable prices, many retirees, like the Zimmers, are buying bigger and better houses than they had before they retired.

“Retirees who started buying in large numbers one and a half to two years ago, were first driven by price, but today, it’s lifestyle,” said Landry of Pardee Construction.

“We see people in their late 60s buying 3,000-square-foot homes and living out their dreams.”

The retirees’ desire to buy large homes explains in part why many of the houses being built in Las Vegas have four or five bedrooms, more than 3,000 square feet and even two stories, which seniors traditionally avoid, Landry said.

Another reason for the new, large homes is the influx of younger buyers with families. Many of these buyers are entering the market to take jobs created by a boom in casino and hotel construction.

But whether buyers are young or old, the housing market is being driven by what Barton terms “the affordability factor.”

“The bottom line of this market is that you can afford to buy a house here,” he said.

Or, as Dan Fitzpatrick, a vice president with Sunland, put it:

“What we’re seeing is buyers who are tired of dealing with the problems of Orange and Los Angeles counties. They find that their cracker-box houses are worth so much there, so they take their money and run here.”

Also, first-time buyers are, so far, finding a place in Las Vegas.

Chris and Charles Dyer, who are in their early 20s, couldn’t afford to buy a house before they moved there, though they lived with her folks in Woodland Hills and he earned more at his job as a legal assistant in Santa Monica.

“I took a large decrease in pay moving to Las Vegas,” he said. But the young couple moved into their own home there, which they bought for $113,000, in February.

But just how long housing will remain affordable and the residential market in Las Vegas will stay hot is debatable. Like the cost of land, home prices are inching upward, a trend some Nevada developers blame on incoming California builders accustomed to bigger profit margins.

Gobar, the analyst in Brea, expects the market to start cooling late this year. “But I’m conservative,” he said. “I send warning signals out earlier than others.”

Smith, the market consultant in Las Vegas, said, “I think we’re at the peak of the current boom, and it will possibly level out in a year. There won’t be a crash unless interest rates go out of whack.”

Lewis, the Upland builder, sees dangers of overbuilding in 1991 or 1992, though he anticipates that the market will be good for a decade.

John Murtagh, vice president and division manager of Bakersfield-headquartered Coleman Homes, which has built and sold 650 houses in Las Vegas since 1987, acknowledged that home prices are “creeping up.”

This is even true, he said, of Coleman’s 177-unit Discovery Bay at Desert Shores, where the Zimmers bought.

“But gaming is the foundation of the economy in Las Vegas,” he said, “and the bloom won’t be off until they stop building casinos.”

A newsletter published by UNLV’s Center for Business and Economic Research noted that the recently opened Mirage hotel/casino and the Excalibur, opening this year, will add more than 7,000 rooms to a stock of about 62,000 rooms, and--depending on the source--another 30,000 to 70,000 rooms are planned.

“The economy is still going strong,” said Harold Foster, director of the city’s community planning and development department, “and it looks as if it will continue for the next several years.”

“A lot of new casino and other commercial development is planned that will continue to create jobs and keep it rolling.”

TOP 10 LAS VEGAS HOME BUILDERS IN 1989 Following are the top 10 home builders in Las Vegas for 1989, based on the number of new homes sold.

1--Pardee, a California builder.

2--Del Webb Communities, an Arizona-based builder also active in California.

3--Lewis Homes, a California builder.

4--American West Development, although based in Las Vegas, some of the firm’s top executives are from California.

5--Signature Homes, a Nevada builder.

6--Durable Homes, a Nevada builder.

7--R/A Homes, a Nevada builder.

8--Metropolitan Development, which has a parent firm based in Los Angeles.

9--Coleman Homes, a California builder.

10--U.S. Homes, headquartered in Texas, has projects in California.

SOURCE: Dennis Smith, Las Vegas housing consultant.

BUILDERS ACTIVE IN LAS VEGAS AND CALIFORNIA

Units Projects Developer Price Range Built Proposed Daly Homes $130,000-$163,900 115* 2 (Founded 1989) Lewis Homes $73,900-$257,900 10,000* 7 (1960) Medici $116,990-$172,990 240* 1 (1989) Sunland Communities $167,990-$180,990 122* 1 (1989) Pardee Construction $50,950-$150,000 10,000 4 (1952) Michael Andrew Group $172,900-$209,900 79* 0 (1989) Century Pacific $230,000-$450,000 23* 1 (1989) The Ved Corporation $90,000-$145,000 0 2 (1989) Calmark Homes $114,000-$174,500 64* 2 (1989) Taylor Woodrow $205,000-$343,000 N/A 3 (1989) Dunmore Homes From the low $100,000s N/A 3 (1989) The Helmer Co. $140,000-$180,000 0 1 (1990) Macleod Development $93,900-$290,000 213 1 (1988)

Note: All price ranges as of January, 1990.

* Represents total build-out of existing products.

SOURCE: The Meyers Group--Las Vegas Division