Vegas Builder Hits the Jackpot

One of the lots Mr. Anderson bought was used to build the “New American Home,” the name given to a model home that captures the latest design trends and is unveiled annually at the International Builders’ Show. This year’s show, a mega convention expected to attract 80,000 members of the home-building and home-renovation industry, opened in Las Vegas on Tuesday.

The home, a sprawling 6,700-square-foot abode with five bedrooms, elevator and rooftop terrace, soon will be listed for sale with a price tag of about $5 million. Mr. Anderson, founder of Element Building Co., hopes that the thousands of people who tour the home—and the national publicity that ensues—will help him sell additional lots for between $200,000 and $1 million each.

During the economic downturn, land prices were so depressed that buying then seemed risky. But now “some of these deals are starting to make sense,” said Greg Gross, a regional director with Metrostudy. In the case of the New American Home site, “being able to pick that [land] up for that price was a steal.”

The lots are carved into the side of a mountain, with views of the desert and strip. Mr. Anderson purchased the land via a short sale after the previous owner, Alpha Land Development, saw the project fall into distress in 2009. “It was pretty much a traumatic thing for all of us,” said Leslie Davis, project coordinator of the now-defunct company. “That was pretty much our baby.”

Las Vegas was a poster child for the housing bust: Overconstruction and lax lending gave way to plunging home values and rampant foreclosures. Home prices tumbled nearly 60% from the April 2006 peak until the December 2011 trough, according to CoreLogic, a real-estate data and analytics firm.

But like the rest of the nation, the city’s real-estate market appears to have hit bottom. The area’s median single-family sales price in December was $185,000, up 24% from the prior year, according to the Greater Las Vegas Association of Realtors. Supply is also tight: About 13,000 homes were for sale in December, down nearly 9% from the prior year.

The high-end market, Mr. Anderson’s focus, has been particularly brisk. Some 343 homes sold for $1 million or more in Southern Nevada last year, the highest count since 2008.

“When high-end inventory comes on the market, it gets eaten pretty quickly,” said Rick Hildreth, a senior adviser with land brokerage Land Advisors Organization. With Las Vegas land prices doubling in the past year, Mr. Hildreth says people who purchased land several years ago now appear savvy.

The New American Home has been a highlight of IBS, one of the nation’s largest business trade shows, since the first one was built in Houston in 1984, said Tucker Bernard, a director with the National Association of Home Builders, which hosts IBS. Each year, the NAHB picks a builder for the home and dozens of other suppliers and tradesman donate their time and materials. Participation is considered an honor.

Mr. Anderson paid for any products and labor that weren’t donated. He declined to disclose how much he spent, but said that he stood to make a “better-than-average profit.”

Things haven’t always gone so smoothly. In 2010, while the financial crisis dragged on, Domanico Custom Homes was picked to build the New American Home. It couldn’t complete the project due to a lack of capital, and the home fell into foreclosure.

Mr. Anderson said participants remain jittery. “All the suppliers and manufacturers remember 2010 and bring it up,” he said, adding that they ask, ” ‘Are you sure this is going to work?’ “

He vowed they have nothing to worry about this year. “There’s new capital,” he said. “It’s going to work.”