Where is the Bottom of the Las Vegas Luxury Real Estate Market?
Posted by Bruce Hiatt - September 22nd, 2008
Categories: News, Opinion
Could the Las Vegas luxury real estate market, especially for luxury high rise condos, be nearing a bottom? What does the recent major events on Wall Street tell us about bottoms of markets?
More and more each week I am reading how Wall Street financial implossion situations are creating a market bottom for many things including real estate. The question is how to read the financial tea leaves to determine when is the real estate bottom?
I am told by various Wall Street contacts that when you have such massive events of such extremes as the US is now experiencing that the bottom is near. It is typified by panic and a rush for the exits. It is often described as an overcorrected mode and that seems to be in the cards now lately. So how is this related to Las Vegas luxury real estate?
What indicators might tell us we are heading towards a luxury real estate bottom in Las Vegas for luxury high rise condos?
- Las Vegas luxury high rise condos in some cases are selling up to 30% below what the buyer originally paid
- Luxury high rise condos in prime locations are selling in some cases below what it would cost to rebuild them
- Very limited supply in prime locations. Currently there is only ONE luxury high rise in the Strip Resort corridor with a Las Vegas Blvd address which is Sky Las Vegas. It has a total of 409 condos.
- Stated income loans are available for a limited number of luxury high rise towers in prime locations
- Credit markets greatly restrict the ability to build more high rise towers resulting in constrained supply
- The number of foreign buyers is greatly increasing for luxury high rise condos
- Owners of luxury high rise condos are leasing and holding onto their properties rather than selling them resulting in a lower supply of condos available for sale
- The media is over hyping the bad real estate news in Las Vegas, especially exaggerating the inventory of luxury high rise condos by 200% or more
- Media continues to equate Miami luxury high rise condo inventory with Las Vegas when Las Vegas has significantly lower high rise condo inventory in equivalent areas than Miami
Bruce Hiatt, Broker, CRS can be reached at 702-456-7080 x201.
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