COLUMN: Thanks given for robust local housing market

We all gave thanks last Thursday. And in between mouthfuls of mashed potatoes and turkey, we also gave thanks for the robust housing industry in Las Vegas.

The events of Sept. 11 added a blow to the already shaky housing market nationwide, especially on the East Coast.

National publications, including the Wall Street Journal and Time magazine, have carried stories recently about cracks spreading through the housing market.

While there was a slowing of traffic and closings immediately after the World Trade Center tragedy, and while cancellation rates went up from 22 percent to as much as 41 percent through September, business in Las Vegas is pretty much back to normal.

Dennis Smith of Home Builders Research Inc. said recently that sales are fine.

"Weekly traffic is back up to where we were a year ago, but we're not quite to the level we were at in late August," Smith said.

However, he pointed out that even though he has revised his figures for new-home sales for the year, "I expect we'll end at a very respectable level of about 21,500 new homes -- another record year."

Smith said he's seen a change in lending policies, particularly those lenders whose headquarters are on the East Coast.

"The lenders are nervous, not the builders," he said. "They feel in many instances, `Vegas can't be doing that good.' The builders don't want to tell anyone (other building companies) from out-of-state how well we're doing here because they don't want them to come here to compete with them."

The larger lenders have tightened their policies somewhat, even to the point of not allowing 401K information to show up on their loan applications, according to Smith. He said smaller lenders, who tend to be locally based, have been offered great opportunities to make some deals.

"Local lenders are in a better frame of mind than national or international concerns."

Rick Piette, manager of Premier Mortgage Lending Group in Las Vegas, agreed.

"He's partly right, but the difference was short-lived after Sept. 11," Piette said.

"We're the fifth or sixth largest lender in new-home closings in the valley, and virtually every large financial institution is buying my loans," he said.

"It seemed like the first two to four weeks it slowed down a bit, but that's almost gone already."

Piette observed that employment is still the No. 1 demand for new-home loans and lenders are requiring on-the-job certifications within 10 days of closing and even requesting calls about employment within a 72-hour window.

In the resale market, local Realtor Marti Scholl said she hasn't seen much change in business since Sept. 11.

"Everything I had in escrow went through," Scholl said. "I've had no cancellations and my partners (Tim and Jenni McKenna of Keller Williams Realty) had no cancellations."

She said she'll have a better handle on things in a few months.

"l'll know a lot better in four to six months when I can look back on October, November and December."

Scholl said she has sold several homes since 9-11 and they sold quickly and didn't require price reductions.

Overall, the resale market continues to be strong, according to Scott Gillespie of Republic Mortgage, whose business is primarily resales.

"My business has rebounded personally and I know a lot of agents whose listings are up," Gillespie said. "The $300,000-plus market took the biggest hit, but there still were bidding wars going on in the $150,000 market."

He pointed out that there are aggressive mortgage programs on the market such as stated income (no income check) and no money down. His company also offers an insurance that pays the mortgage should the homeowner be laid off.

"I locked a (stated income) consumer in today (Nov. 15) at an 8 percent rate with no prepayment penalties or discount points," Gillespie said.

Most people I interviewed said the high-end market was hardest hit by the slowdown. Steve Hackney, president of Christopher Homes, took exception with that theory.

"It's difficult to quantify," Hackney said. "Right after the Trade Center disaster we, as all builders, saw a moderate drop in traffic with the lower end showing more.

"However, we sold three homes at Southern Highlands last week. I would have to say that we saw a blip, but as far as our communities are concerned, that's all it has been."

Christopher Homes has not entertained decreasing sales prices, nor has it increased incentive programs, according to Hackney.

He believes the custom- home market probably has had the most noticeable slowdown, but that those buyers are only delaying their decisions.

Hackney said the company is much healthier this year than last and says its buyers are more interested in the quality of their home than getting a deal.

Jim Cerrone, president of Signature Homes, said the company "lost four sales

out of probably 100 right

off the bat because people

working in casinos lost

their jobs."

"We gave their money back, no questions asked," Cerrone said. "I just heard one is buying again because he got rehired."

Signature also sells in the 55-and-older market, which includes a number of retirees whose incomes depend upon interest garnered from the stock market. Cerrone said the company just had its best two weeks in sales for that market.

"We're right on track relative to last year," he said. "Sales, cancellations and conversion rates haven't changed a bit. I think we've been very lucky."

And very thankful.

Carmel Hopkins, real estate product manager for the Las Vegas Review-Journal and Las Vegas Sun, can be reached at 380-4574. Her e-mail address is Carmel_Hopkins@ lasvegasnewspapers.com. Snail mail is P.O. Box 70, Las Vegas, NV 89125.

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