Las Vegas High Rise Blog » Proof of local consulting firms flip-flopping their Las Vegas Strip condominium stats.

Proof of local consulting firms flip-flopping their Las Vegas Strip condominium stats.

Posted by Luxury Realty Group - January 12th, 2008
Categories: High Rise Condos

Recently, I wrote an article that addressed a serious problem that the Resort Corridor condominium market is experiencing when it comes to false reporting by the media about the Las Vegas Strip. In many cases, reporters are getting information from local consulting firms who flip-flop their statistics. Case and point? A local firm just released a report saying high rise sales and price per square foot are way up. This after just a week ago, bashing the high rise market in the press.

Many times, the local analysts have little experience with real estate. Their job is simply to crunch numbers, not understand intangibles such as pre-construction stats at places such as MGM MIRAGE CityCenter which sold over $1.5 of Las Vegas Strip real estate in 2007 alone.

A great example is a local firm who shared completely opposite viewpoints in two separate articles in one weeks time. Either that or the media got the report wrong.

In a recent article about Trump Towers, the reporter quoted a source from a local consulting firm who said that the high rise condo market was in worse shape than the single family home market and that median prices for mid and high rise had dropped over 15% in 2007. In less than a weeks time, this very same firm released a report saying that high rise sales had increased dramatically in the 3rd quarter of 2007 and price per square foot of luxury condos had risen up to 5%.

How could the high rise market be worse than the single family home market in 2007 and experience an over 15% decline in median pricing while at the same time experience a 5% average price per square foot increase in the 3rd quarter of 2007. The numbers don’t add up. This type of thing happens all of the time.

Who is to blame?

Consulting firms or reporters who don’t fully understand the dynamics of this niche market? Perhaps real estate agents? How about EVERYONE.

Why consulting firms make mistakes?

They’ll look at the overall housing market and mesh into one rather than realize high rise condos are a different entity. This is a big mistake as the single family home and high rise markets are separate entities.
They’ll compare all Las Vegas high rise markets as one and blend comps. This can’t be done as the Resort Corridor (core Strip) has smashed all other high rise markets over the last 24 months in pricing and sales.
They’ll ignore pre-construction sales. You can’t say sales are slow on the Strip when CityCenter sold $1.5 billion in real estate in 2007 alone. Many times, consulting firms do not have access or have knowledge of new sales in escrow. This is misleading to the public. Don’t you think the whole story should be told?
Many times, they’ll say that 100,000 luxury condominiums have been cancelled without ever explaining they were never real projects to begin with. How come? Because they don’t know any better. Why? Because they are not real estate agents, they are number crunchers. They don’t always sniff out land flips, challenged projects etc. What they look at is the county records for proposed and cancelled projects. PERIOD.
They use the MLS (multiple listing service). Well that’s a problem if they aren’t calling every single new development in town and getting ALL pre-construction stats as well. You can’t judge a market by only reporting resale listings, or recently solds.
Sometimes a representative of the company will give a quote while they don’t realize another dept or individual is finalizing a study that proves otherwise.

See what Jane Wells and CNBC had to say about the high rise condominium market

Why do reporters make mistakes?

They have deadlines for stories and can only do so much due diligence.
The truth is sometimes difficult to find as some developers do not want to say how good or bad they are doing.
They are writers, NOT investment experts or real estate market experts.
They get bad info from consulting firms or agents who may not know the latest.
Human nature. Mistakes happen. The problem is…when mistakes go to print, the entire world sees that news as truth.

Why do most people not trust real estate agents for trustworthy information?

Because they’re sales people and usually hype the market.
Because very few specialize in the niche of high rise and usually have just as much false info as a reporter or consulting firm.
Many have outdates websites and blogs which focus on hype and sales rather than educating readers through factual statistics.

Learn 15 questions to ask a Realtor before hiring them to purchase a luxury condominium

News and Information needs to get better for the consumer.

Seeing a local consulting firm quote things are horrible one week and then release a report the next week saying stats are up is frustrating. Not to mention confusing for the consumer and horrible for Las Vegas. Unfortunately, it doesn’t surprise me as I see it happen frequently.

I challenge all forms of media, consulting firms, and real estate agents to do a better job reporting the Strip in the future.

Aaron Auxier, REALTOR® can be reached at 702-205-1818.

Luxury Realty Group is recognized by the press as a leading brokerage on the Strip. They can be seen on networks and in publications such as CNBC, Forbes Magazine, Details, LV Business Press, Wall Street Journal, The Review Journal, Los Angeles Times and USA Today.

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All information in this blog is subject to change without notice. Subject matter is not guaranteed and is often considered time-sensitive. See DISCLAIMER.