Las Vegas Homes and Real Estate News

Three-story homes becoming common sight

Smaller tract allows owner more bang for their buck

BY VALERIE MILLER
BUSINESS PRESS

April 17, 2006

As land prices rise and available terrain shrinks, residential developers are taking a page from the books of cities like Chicago and New York and are building up rather than out.

Close to a half-dozen homebuilders are now trying their hand at three-story homes in Southern Nevada, according to Dennis Smith, the president of Homebuilders Research. He sees it as a logical step. "Builders will face more challenges with density and land prices, and with all these public builders, they can go out and scour the countryside for ideas from other cities. Smaller builders will follow suit," Smith added. "If they are affordable, why would people not buy them?"

Astoria Homes President Tom McCormick was at the forefront of the trend. He began building his first three-story homes in late 2005, as part of its 1,254-home Tapestry development in Centennial Hills. At build-out in late 2007, some 150 to 200 three-story residences will be included in the three-neighborhood project. Those three areas will be called the "Lanes," "Avenues" and "Courts." Of those, the 480-home "Lanes" neighborhood will include the tri-level product. A few three-story model homes are open for viewing. "The real challenge is that the land price is so high that we are seeing what we can do to keep it down on a per-home basis," McCormick explained.

To date, the response has been positive. "They are selling quickly," McCormick maintained. So strong has been the demand that the developer is the process of making plans for his next development -- "Hillside," in the Lone Mountain area. That community will have 371 homes of which 150 to 200 will be three-story products.

In the case of Astoria, buying a three-story home can give the homeowner more bang for their buck. A single-story, 2,100- to 2,200-square-foot home in Tapestry would run about $400,000, but a comparably-sized three-story home costs about 25 percent less because smaller lots are used, McCormick noted. The high-end of pricing for the three-story homes runs about $324,000. "Doing this, we knew it was risky, but we have been pleasantly surprised," he admitted, "because it does offer a lot for the money. We have plenty of people waiting for the three-story homes."

In March, the median price for 2,521 homes sold during the month was $314,950, up 6.8 percent from the same month a year ago, according to the Greater Las Vegas Association of Realtors. The continued upward climb in home prices has led to more builders looking skyward in single-family developments.

KB Home is following suit in its planned Apple Creek Village in the builder's Sierra Ranch development in northwest Las Vegas. The 111-home village will include 11 three-story residences near Ann Road and Commerce Street. In its Alturas community in Mountain's Edge, KB Home offers five different styles of three-story plans. The 83-home southwest Las Vegas community will consist of two- and three-story single-family residences built around a cul-de-sac near Cactus Lane and Tenaya Way. Completion is scheduled for the second quarter of 2007, and three-story homes start at approximately $308,000. Three-story attached brownstones are slated for KB Home's Oxford Commons community in northwest's Providence development. Another three-story home is schedule for Henderson's 2,000-acre Inspirada community opening later this year. The Henderson project has been hailed as an example of "New Urbanism" by city planners.

MAKING HOMES AFFORDABLE

KB Home entered the three-story market in Las Vegas to give homebuyers a chance to get into homes that otherwise would have been out of their reach, according to Shelly Stewart, the builder's executive vice president, Las Vegas division. "We were looking at a more affordable product, and it allows for diversification in style and a higher density for land prices," she said. "We based it on feedback from our customers."

The approximately 2,000-square-feet, three-story KB Home's homes are priced from $282,000 to $287,000. By comparison, an 1,800-square-foot, single-level KB Home home would cost about $310,000. Beyond the savings, there's a sense of luxury living at that three-story level, Stewart contended. "You have a lot of people who like that master's suite on third floor with no other bedrooms."

Market Solutions Executive Vice President Steve Bottfeld said the three-story trend is yet another sign of the Manhattanization of the valley, along with high-rise condos. " New York ran out of land, too," he said. "The suburbs of Las Vegas used to be Summerlin and Green Valley. Now they are Kingman and Mesquite." Bottfeld expects the single-level, tract-home dwellings to become a rarity in development over the next decade.

American West Homes Inc. has taken a slightly different approach to its planned three-story community. The extra floor gives a sense of accessory housing, cassita-style, explained the company's vice president, Leslie Bausher. "A mother-in-law can live there," she said, noting the inside stairway and landing between the first and second floors. One of the three-story homes slated for Highland Ranch, north of Southern Highlands, is already open.

Bausher sees the vertical move as a necessity. "I don't know if it is somebody's first choice to live in a three-story home, but it will become more normal as time goes on."

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