Luxury Real Estate Flippers Are Back in Las Vegas
Posted by Bruce Hiatt - May 29th, 2008
Categories: High Rise Condos
Next time you read an article or see a news broadcast about falling Las Vegas luxury real estate prices, ask yourself if the replacement cost for such luxury real estate is still a valid component of real estate pricing. Have luxury real estate flippers already discovered this interesting paradox? Looks like it.
As I am sure you are aware, Las Vegas has foreclosure and bank owned properties with some of these in the luxury real estate category. In fact, multiple offers are now occuring for some of these properties. Current trends show interest by buyers has been increasing significantly over the past two months for this category of real estate in Las Vegas.
But why wouldn’t these buyers wait you ask as no media has declared a bottom of the real estate market in Las Vegas? Well, there’s an undercurrent in luxury real estate you aren’t seeing. It seems smart buyers are searching for luxury real estate in prime locations that are well priced including those that are banked owned.
What is the incentive for such buyers to be searching for these luxury properties you ask? Well, the savvy ones have recognized what we have seen lately that says something is wrong with the replacement cost component of pricing luxury real estate, especially high rise condos or homes in high-end guard gated neighborhoods, in Las Vegas. Consequently, these savvy buyers are searching for the luxury real estate that they can flip for a profit.
Before you conclude that this scenario is an isolated example, consider the cost of gas the next time you fill-up your vehicle. Already the price of gas has exceeded $4 a gallon in many major US cities. What about the cost of wheat, gold, steel, and other commodities? Now roll your mind back to 2004 or earlier and ask yourself what were the prices of these items back then?
Why is it that everything else in the US is experiencing major price increases in 2008 while housing is continually battered by the media to be collapsing in price? How can real estate appraisers account for such major non-real-estate price increases and ignore them in their replacement cost analysis you ask?
Well, we aren’t appraisers but we do know to ask in-depth questions about luxury real estate in Las Vegas. Something is very wrong folks with replacement cost analysis and the housing prices in Las Vegas per the media reports of late all showing a downward trend.
Let me repeat it again. Everything around you in your lives today is rapidly increasing in price. The cost to rebuild a luxury home or a luxury high rise condo in Las Vegas today is not the same cost it was in 2004.
What is wrong with this picture? Plenty and we believe the luxury real estate flippers and buyers are on to something here. Will be very interesting to watch these price trends by the end of 2009 when higher cost luxury real estate comes to market in Las Vegas like MGM MIRAGE’s CityCenter. Stay tuned.
Bruce Hiatt can be reached at 702-456-7080 x201 should you wish to purchase a luxury home or high rise condo in Las Vegas.
Copyright 2008, Luxury Realty Group LLC. All Rights Reserved.
Bruce Hiatt, Broker, CRS can be reached at 702-456-7080 x201.
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Copyright © 2008 Luxury Realty Group LLC. All rights reserved.