For a while home builders thought everybody who lived in the hard-hit Las Vegas market was broke.
“When you looked at the landscape in Vegas, we were all going after entry-level and first-time buyer,” recalls Matthew R. Zaist, William Lyon Homes' president and chief operating officer.
Then, as the housing recovery took hold in early 2012, Mary Connelly, president of William Lyon’s Nevada division, and her team noticed two things: High-end resale homes were very desirable and no new home builders were building houses priced at more than $300,000 and more than 3,000 square feet.
“We found a very under-served market,” said Connelly.
Luckily, William Lyon had a quick way to tap that market -- an abandoned gated custom-lot community called Serenity Ridge in Northwest Vegas that it bought in 2010 at distressed prices. William Lyon planned to start building in Serenity Ridge in late 2013 or 2014, but it fast-tracked the community, platted for 108 half-acre lots, to open in November 2012.
William Lyon made use of the roomy lots, offering four one-story sprawling floor plans designed with accordion features that allow buyers to customize their homes by stretching covered porches, adding bonus rooms, multiplying garage bays, and creating guest suites. There’s even an RV area option.
“We pretty much service most option requests,” said Connelly. “We don’t know of any other builder in town who offers this.”
Immediately after opening last November, sales agents began taking two to three home orders a week. “We had to slow it down through pricing and smaller releases,” Connelly said, noting the average now is 1.2 homes a week.
“Frankly, we couldn’t keep up with demand,” said the William Lyon executive. “When you have that extensive an option and upgrade program, it takes a large amount of field time to manage that.”
The company hired a full-time options superintendent who does nothing but meet with home buyers and a full-time operations superintendent to manage the customizations in the field. “Our teams have done a very good job to ensure that we are doing it right, Connelly said.
The four model homes showcase almost every custom option the builder offers, helping buyers visualize what they would like in their own new homes. And to help make customization possible on a production home building schedule, all plan expansions were pre-approved by local building officials.
William Lyon will include additional custom requests if they won’t add much time to the production schedule, and if they won't impact the company’s ability to sell the home if the buyer fails to close.
“We have a very experienced team that assesses any of those kinds of impacts to our schedule or marketability,” she said.
Customization = Higher Prices
The customizations have been quite profitable, adding an average of $100,000 to the base model prices. The average sale price is about $600,000.
Among the most popular upgrades are expanding the covered patios and adding telescoping glass doors to the patios. Huge elaborate outdoor kitchens also are popular as are high-end upgrades to the main kitchens. Likewise, customers are opting for copper farmhouse sinks and upscale appliances.
About 70% of the buyers are local residents; of that number, 75% are professionals. Buyers surveyed say they bought in the community because of the one-story floor plans and the customization.
“It is a premium to have a one-story community [in Vegas],” said Connelly. “People prefer one-story homes; people love the privacy, so when you have lots this big why not build beautiful estate ranch homes? We hit that market right on point.”
Eager to repeat its success, William Lyon plans to open two more high-end communities in Vegas by the end of the year, including one in The Ridges gated community in Summerlin. Homes there are among the most expensive in the market, priced between $600,000 and $700,000.
Builder: William Lyon Homes, Newport Beach, Calif.
Community: Serenity Ridge, Las Vegas
Average Sales Per Week: 1.2
Average Sales Price: $600,000
Price Range: 453,000 – $532,000
Square Footage: 3,032 – 4,000
Teresa Burney is a senior editor for BUILDER.