The top three occupations filing unemployment claims in August, “without a doubt, were construction laborers, carpenters and electricians – the sorts of jobs that we see with home construction,” said an economist that tracks employment data for the state. (Photo by Justin Sullivan/Getty Images)
A precipitous decline in new home sales in Southern Nevada is contributing, experts say, to a loss of construction jobs, which fell statewide by 4,400 in August, according to the Department of Employment, Training, and Rehabilitation. Construction jobs are off 6.9% statewide for the year, according to David Schmidt, chief economist for DETR.
The top three occupations filing unemployment claims in August, “without a doubt, were construction laborers, carpenters and electricians – the sorts of jobs that we see with home construction,” said Schmidt in an interview Monday. “As we’ve seen this slowdown in the housing market, I do think that is being reflected in both our unemployment claims data and the slides we’ve seen in construction employment so far this year.”
Nevada construction “contributed $20 billion (7.8%) of the state’s GDP of $260 billion” in 2024, reports the Associated General Contractors of America. That’s the second-highest rate in the nation behind Utah (8.5%), according to QI Research.
The U.S. lost 7,000 construction jobs in August, according to the Bureau of Labor Statistics, meaning Nevada accounts for almost two-thirds.
But Schmidt warns against placing value on initial reports, given that federal “monthly numbers get revised several times, because there’s a lot of uncertainty in the data.” The government’s margin of error, or “confidence interval,” projects the actual national number could go up or down by about 25,000 jobs.
“It’s horrible,” Patricia Farley, owner of Southwest Specialties, a high-end contractor that installs pavers and other hardscapes, says of the lull in home construction. In busier times, Farley says her company worked on 35 to 45 homes per week. That dropped to 22 to 30 a week in the two years following COVID. In August, jobs plunged to 10 to 15 a week.
“Homebuilders and subs are laying off,” she says, adding homeowners are not remodeling and commercial properties are not making tenant improvements.
In January, homebuilders in Southern Nevada sold 974 homes. That’s steadily declined to 653 homes sold in August, according to data from Home Builders’ Research.
Standing inventory of finished homes stood at 688 for the first week in September.
“If a builder has $300,000 sunk in a home and they have 100 homes sitting in standing inventory, they have $30 million just sitting,” Farley said. “They pay interest on those homes every month, as well.”
Farley contends new and existing homes are overpriced – a factor she says overshadows high interest rates. “If a $250,000 house is selling for $450,000, it doesn’t matter what the interest rates are.”
New homes, she says, are shrinking in size while doubling in price.
Lennar Homes, the second largest builder in the U.S., saw net earnings for June, July, and August fall from just under $1.2 billion last year to $591 million this year, an almost 50% drop. The builder is slashing prices by 22%, resulting in a spike in new orders.
“New home builders want nothing more than to sell, build and deliver as many homes as they can for Nevadans,” says Tina Frias, CEO of the Southern Nevada Home Builders Association.
Builders, she says, “continue to be creative in developing product across a range of price points, but their ability to reduce costs is difficult when considering the price of land, labor and materials.”
Frias says there’s “no question that broader economic conditions, consumer confidence and the interest rate environment are contributing to the performance within the housing market. Sales volumes have slowed from post-pandemic highs when mortgage interest rates were low, but pricing has remained relatively stable – both in the new home and resale segments of the market.”
Las Vegas real estate agent Diane Varney agrees that prices of existing homes have fallen and remained stable for much of the last year. But seller expectations remain high, resulting in overpriced properties, at least on paper, where seller concessions for repairs, interest buydowns and more are not apparent.
A glut of existing homes for sales in Southern Nevada has “flattened out a little bit,” says Varney
“We had 5,500 homes for sale on the Multiple Listing Service in January. Now we’re close to 8,000, but it flattened out a little bit in August to mid-September. We didn’t see the inventory climbing by 100 homes a week like we were.”
The median price of an existing home has held steady around $480,000 for much of the past year.
Nationally, 25% of home sales are falling out of escrow, according to Varney, who says in Southern Nevada, the number is between 15% and 18%. Homes that are on the market for 50 to 60 days, she says, have a 30% chance of selling, according to tracking data. Buyers, exposed to a plethora of homes for sale, “don’t want a project. They want a turnkey home.”
As for what to expect from the economy, Schmidt of DETR says he “doesn’t see a pullback,” adding wages and hours remain strong, which he says indicates an interest among employers to hire, despite uncertainty.
“We’re just kind of flat,” he observes. “We’re kind of waiting to see where things will be going over the next six months.”