Overcoming Challenges &
Developing Unique Products
for a Growing Market
Published January 28, 2020
How long have you been with Richmond American Homes, and how can you best describe the evolution of the home building market in Las Vegas during your tenure?
I just celebrated 20 years on January 3. This is not my first job in homebuilding, but it is my longest. My experience working in the Las Vegas housing market has been the highest of highs and the lowest of lows. I had not been through a huge market cycle during my career until the great heights of the housing market, which was then followed by the Great Recession. That market cycle was challenging because the pre-Recession buyers were mostly investors who were emotionally detached from the properties that they were looking at. As a homebuilder, our objective is to build a home that people can connect with, and we just weren’t getting that from a lot of the buyers in that market. Today, the situation is much different. Our customers have an emotional connection to the home since they are actually going to be living in it. They appreciate the efforts that we’ve made to design and build the home according to their personal wants and needs.
Though the housing crash was over a decade ago, many Las Vegans have not forgotten the effects that it had on the local economy.
From my own perspective, I found watching the aftermath of the market crash incredibly difficult from an emotional standpoint. It was so hard to watch homeowners struggling with underwater mortgages, or even losing the properties to foreclosures. It really hit home when I had my own team members going through the exact same challenges, but I will say that going through those times and what we learned from it is one of the biggest reasons for our success now. Also, when you work with the same team for a long time, like we have here at our Las Vegas division, that familiarity, along with our market knowledge has helped to make us incredibly effective.
It feels good to see a more well-balanced market today. I think that the industry has learned a lot of important lessons from the crash. I see us being more responsible today than during the height of the market.
"We have been starting to see prices in excess of $700,000 an acre and it's still going up from there."
The SNHBA has been active in addressing home builder concerns at the legislative level, as well as advocating for workforce development.
What are the challenges that home builders are facing today in this market?
Land prices and land scarcity are two major issues, as are a labor shortage and the age of our labor force.
It’s incredibly challenging to build affordable homes in Southern Nevada today. Land costs and hard costs are the two biggest factors that we face. Yes, there is BLM land that is available, but that’s becoming quite scarce, and prices continue to escalate. We have been starting to see prices in excess of $700,000 an acre and it's still going up from there. There are multiple builders bidding for every piece of land and remaining competitive while building at an affordable rate is quite a hurdle to overcome.
We’re also facing a labor shortage. When you walk around a construction site, the average age of our laborers is quite high, and we don’t necessarily see new entrants coming into the building trades. It’s very rare to see young people graduating from school and picking up a trade such as framing or plumbing, so it’s not like the problem is going to get solved overnight. I do have to give credit to the Southern Nevada Home Builders Association, which has done an exceptional job to develop workforce initiatives. In addition, there are several trade partners who have established their own in-house training programs, and we hope to see more companies get involved to help us stem this shortage.
"Affordability is very important to buyers, and the sweet spot seems to be the 1400-1900 square foot range, especially under $300,000."
What are the home sizes and price points that are most popular in today's market?
Single-story homes are quite popular, but there isn’t an abundance of them, even in the resale market. In fact, it’s not very common to find entire single-story communities. A lot of this goes back to the days of the boom, where we built up, versus out. We’ve made a conscious effort to address this. One of our best-selling products is our 1700-2000 square foot single-story homes. These are especially popular because homebuyers are staying in their homes longer and may not necessarily want a two-story home 10 or 15 years down the line. Around 40% of our closings in 2019 were single stories, and we don’t see the popularity in them letting up anytime soon.
The Bellamont community in North Las Vegas features highly-coveted
single-story homes under 2000 square feet.
Affordability is very important to buyers, and the sweet spot seems to be the 1400-1900 square foot range, especially under $300,000. One of the ways that we’ve addressed this is with attached products. We have a series called Urban Duplex with so many windows and so much space that is doesn’t even feel like you’re in an attached home. With rents in Southern Nevada on the rise, this provides a great alternative.
Our focus at the moment is on affordable developments, since that is where the demand is. With FHA loan limits increasing, these products will be more attainable to buyers. We tend to see the market shifting away from the large two-story properties and focusing more on these single-story and attached properties.
Do you have any new communities that are coming online that we should take note of?
We’re going to be breaking ground in Lake Las Vegas for the first time ever with our Urban Duplexes and our Seasons Collection. These are part of our more affordable home designs in the 1400-1900 square foot range. We have three communities about to open up in Cadence, which is an area where we already have a strong presence. Lastly, we’re set to open up in Sedona Ranch in North Las Vegas with our Cortland development.
Prelude at Cadence is part of Richmond American Homes'
attached product line.
"We are seeing more young people purchasing homes nowadays. The difference with these buyers is that they don’t want to be “house poor,” hence why they prefer affordable and attached products."
How much of an impact have demographic changes had on the types of homes that, and what are those demographics?
We are seeing more young people purchasing homes nowadays. The difference with these buyers is that they don’t want to be “house poor,” hence why they prefer affordable and attached products. These types of homes provide buyers with financial freedom, as well as tax breaks that renting doesn’t necessarily provide. Attached products with a more urban feel has worked really well with that demographic. Some developers have also added “smart” features to new builds, which also tend to be popular with the younger tech savvy generations.
Millennial home buyers look for smaller square footage
that still allows them disposable income.
We also see a lot of Baby Boomers and Gen-Xers that are very active in the market, specifically when it comes to single-story properties. These buyers are looking to purchase for the long-term, and single-story properties tend to fit best with their lifestyles. There are other developers that specifically target senior citizens, who have also built sizable single-story projects aimed at that demographic. We don’t build senior communities per se, but we do build single-stories as an options for seniors who may not necessarily want to live in an age-restricted community.
You were recently awarded Member of the Year by the Southern Nevada Home Builders Association. How does it feel, and what did you do above and beyond in order to receive such an accolade?
This award came to me as a surprise. I can honestly say that my focus is to dedicate myself to initiatives that I’m passionate about. I serve on the SNHBA’s Executive Board, as well as on the Legislative Committee. I am also a co-Chair of the Professional Women in Building group. I strongly believe that if you’re going to build homes in Southern Nevada, you should get involved with the SNHBA. There are fantastic people involved with the organization and the staff is truly amazing. I was very touched and very happy to have been recognized.
Nicole was awarded Member of the Year by the
Southern Nevada Home Builders Association.
Don't miss Nicole speaking on her panel at the
Las Vegas Property Development & Infrastructure Conference
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