Las Vegas real estate market report

Not all Las Vegas real estate isbeing sold for the same price and it isn’t just the location or the size that dictates the price!  Investors are currently flooding into the market looking for the real deals and they are finding them.  Some Las Vegas home Buyers are finding real deals with prices that comparable homes were selling for at or near Las Vegas real estate boom prices.  My Banks and individuals are selling well below the current average in an effort to sell their property NOW.  This has resulted in some properties below the $250,000 mark receiving multiple bids.

With the increase in full and all material costs, these homes are selling for below what it would COST (without profit) to reproduce them.  What this means is that investors are buying at record lows and stand to reap the benefit as the real estate market in Las Vegas once again changes course with new employment opportunities that are scheduled to come on line as the massive $33 Billion dollars of casino expansions come on line in 2009.

Recently Ben Bernanke recently said that the Fed. would start increasing the prime rate. This will result in an increase in mortgage loans. NOW is the time to jump in and purchase homes in Las Vegas before interest rate increases and while these deals last.

The Greater Las Vegas Association of Realtors is reporting that there has been a substantial jump in homes under contract last month.  Buyers are now making their move. I believe this could spell the bottom of the market that everyone has been waiting for.

It’s time to get busy buying a home.

For the Latest in Las Vegas real estate call Max at 702-334-2200. Or email me at:Max@MaxSellsVegas. com. Your comments and questions are welcome.

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Although the real estate market in Las Vegas is still very week their are signs of life and the future is bright.  Las Vegas housing was simply over built in 2005 and 2006. This was due to heavy appreciation in the market place, easy credit in the mortgage markets, and heavy speculation by opportunity investors.

In order for the Las Vegas real estate market to get healthy again the following things must occur.

1) The existing excess inventory of new homes must drop.

This for the most part has already occurred .  Standing inventory of new homes have dropped to about 1,000 units (excluding age restricted neighborhoods that are not as affected by the down cycle).  Many builders have dropped their incentive programs of closing costs and upgrades and have replaced them with the lowest price and guarantees if the prices drop further between the contract signing and the delivery date of the completed home.  Building permits for the first 3 months of 2008 have dropped over 66% from 2007 levels. Of the 440 neighborhoods with new homes for sale in them 85 of these neighborhoods have 10 sites or less available translating into a drastic drop in available subdivisions in the next 6 months. All the above shows signs of shrinking the Las Vegas new home markets.

2) Repossession’s must slow.

Although Las Vegas home repossession’s have not slowed yet their are several signs that this may occur.  Many of the initial flood of repossession have been the inexperienced short term investor that bought homes at the height of the market in hopes of making a profit and got caught in the market turn around.  Most of these investors have now walked away from their properties and we are seening  these homes as REO repossession’s now in the market place.

One thing that the fed’s have done is to drastically cut the prime rates to banks.  Although the mortgage interest rates have not decreased as much as they have historically, a very little talked about result is about to show its self.  There is a huge number of ARM loans who’s interest rates are to reset over the next 6 months.  Most of these ARM loans are tied to prime rate so the lower the prime rate the lower the over all the percentage rate will be for the home owners that have these ARM’s.  This will result in more of these home owners being able  to make their payments and stay in their homes resulting in fewer repossession’s.  We will still have a flood of repossession’s over the next 9 months as the homes that are in default now will be cycled into the market place but look for repossession’s to slow by this time in 2009.

3) The mortgage markets must stabilize making money available to qualified buyers.

Once again the Fed’s have come to the rescue with new Fanny Mae and Freddie Mac guidelines allowing for them to enter the jumbo loan areas.  A more important change by the Fed’s have been the FHA programs which have been expanded allowing more flexibility in obtaining an FHA loan.  Lastly many conventional lenders that have repossession’s are making down payment concession to qualified first time home buyers allowing them to purchase one of their reposessed homes with as little as no money down.  The mortgage markets are showing slow signs of stabilizing although the conventional markets are still in an uproar.

4) Las Vegas existing real estate inventory levels must come down.

The Greater Las Vegas Association of Realtors reports that in the first 3 months of 2007 new listing totaled 29,905 units.  For the same period in 2008 new listings were 25,752 units showing a slight decrease in listings of approximately 14%.  This downward trend in monthly listings actually started in November of 2007.  Although this is not huge turn around it does show an emerging consistent pattern in the market place.  Even with the huge number of homes being repossessed and placed on the market the total number of homes for sale in Las Vegas is slowly shrinking. As the number of Buyers increase this number of available homes will decrease at an accelerated rate.

4) The price of Las Vegas homes for sale must come down.

According to GLVAR the average price of a Las Vegas resale home in 2007 was $303,497 in the first quarter of 2008 the average price of a home was $262,332.  That is a drop of approximately 14%.  If you prefer to use the median price of a Las Vegas home then in 2007 it was $300,626 and in the first quarter of 2008 it was $246,500. This calculates to approximately an 18% drop in prices. Much of this decrease is due to the sale of Las Vegas REO bank owned properties which have amounted to over 56% of all sales in the first quarter of 2008. It is clear to we Realtors that deal in the market every day that REO bank owned homes are leading the market in sales.  Not all prices on all homes will ever come down uniformly but the opportunity is currently available for many excellent purchases at fire sale prices.

5) The Buyers must come back into the market and purchase.

Yes here also their are signs of real movement in a positive way.  With the devaluation of the U.S. dollar and the drop in prices we Real Estate Agents are seeing a flood of foreign Buyers.  They see an opportunity in our market and they are purchasing.  Many Las Vegas prospective Buyers are waiting to see if prices will continue to fall.  What most people don’t realize is that their are many great opportunities now that may soon disappear.  The whole Las Vegas resale market will never drop its prices across the board as each property is owned by different people with different motivations to sell.  Currently their are many properties on the market at prices that they sold for in 2004.  We are approaching pricing in many communities that are below the cost to replace them.  In my opinion we are near the bottom in price depreciation and because we are seeing some movement in the Buyers coming back into the market we may start seeing a firmer pricing policy by the banks that control the REO’s.  If we look at the 2005 property closing numbers which was a banner year in Las Vegas real estate sales we can see a surprising trend in comparison with 2008.  The first quarter of 2005 had 9,582 homes sold while in 2008 their were 8,907 homes sold which is not a huge difference in sales. We may actually grow in over all sales in 2008 if this trend continues and their is no reason to see a change in this pattern. 

An interesting statistic is the supply of homes in the market place.  This supply is figured by dividing the number of sales in a month by the number of homes on the market the result is the number of months of supply in the market.  As the number of sales increase or the number of listings decrease the number of months of supply decreases.  A balance market is considered to be a 6 month supply of homes.  In Las Vegas our Supply of homes in the market place in the last 3 months is as follows: 

Single Family Resale home supply based on home for sales divided by sales.
Dec. 2007  24.53 months
Jan. 2008  22.49 months
Feb. 2008  20.49 months
Mar. 2008  15.40 months

My personal observation is that we are seeing more and more Buyers quickly coming back into the market place.  This will result in the inventory levels to continue to drop and prices will stabilize.  If this trend continues at this pace we will see a balanced market of 6 months supply with in the next 6 months and that means prices will stabilize. This also means that we may start to see prices on new homes once again begin to rise around October of this year.  If your a Buyer and wait another 3 months to buy you may have missed the bottom of the Las Vegas real estate market.  I am not forecasting a huge jump in prices for this year or 2009 but we may see prices rise from their current 2004 levels to a normal appreciation rate of 4% per year which will mean by the end of 2010 with the demand surge because of all the new massive property openings on the Las Vegas Strip (120,000 estimated job creation) we could see a 15% increase in value over the fire sale prices we are seeing now.

For the Latest in Las Vegas real estate call Max at 702-334-2200. Or email me at:Max@MaxSellsVegas. com. Your comments and questions are welcome.

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Well the big sports area in Las Vegas City may have just grown wheels under it.  What has developed is not surprising, its just typical big business. 

The players include the little guys that own property south and west of Charleston and Main Street.  They all got dollar signs in their eyes like little girls looking at pop idols dreaming that they would get rich quick by selling their property from 3 to 4 times its real value.

Then we have the City of Las Vegas trying anything to extend “The Strip” further in to the “Fremont Street Experience” where their City Casinos (Cash Cows) have not been doing well.  Most people do not know that the only major Casino located in the City that is on the Strip is Stratosphere.  All other Strip Casinos are located in the county and do not contribute tax dollars to Las Vegas City.

The third big leg to this stool is REI Group who proposed this Mega development to include a Sports Arena, Casino and Hotel.  They have recently announced a new partner in the development “The Cordish Co.” More on that in a minute.

Now if you have been reading my writings for a while you know that Stratosphere sold to Goldman Sachs and that the sale included 10 acres of develop-able ground.  I told you Sachs had not indicated any expansion plans to date.  Well I think that just may have changed now.  They have made no announcement but it appears the new sports arena may have grown trailer wheels and moved south to snuggle up with Stratosphere.

It seems REI’s new partner The Cordish group has close ties to Goldman Sachs.  With the current tight development financing it may be tough to get a huge project done right now but what if you could drop the hotel and casino and just build the stadium which would take fare less land and still provide the needed support for a new Sports Arena.  And by doing so you don’t have to pay 40+ land owners ridiculous prices for their land.  Wow, that may just pencil. 

Yep, My guess is that Goldman Sachs and REI have know about this since Goldman initiated the deal to buy the Stratosphere.  I have seen very few deals go through by assembling 40+ land owners to make a project.  The problems are impossible as some owners will always blackmail and sabotage the project. So it appears the all those land owners can find buyers on their own to pay them the big bucks because it appears the party for the Sports arena just started and its at the Stratosphere.

The moral to this little tail is that if the 40+ owners really want to do a deal then they better get organized.  They better get their prices in line and form a joint land owners group under which their land is contractually packaged and they own shares in.  Then they have a bargaining tool.  I am not suggesting that the Sports Arena will come back on their site.  But with the Strip land being all sold off they could hold the site for the next major casino project in Las Vegas.

For the Latest in Las Vegas real estate call Max at 702-334-2200. Or email me at:Max@MaxSellsVegas. com. Your comments and questions are welcome.

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If you have been reading my blog you know I have been saying that the real estate market is going to come back strong in late 2009 and we should see prices climb to their previous highs by approximately 2012.  Job creation is going to spur this sudden resurgence in the market as the $33 Billion Dollars of development on “The Strip” finishes construction and will create new jobs by the tens of thousands.

Finally the press is seeing the potential of the Las Vegas real estate market again.  In the last few days alone two national news and information publishers have come forward naming Las Vegas as a great place to find a piece of real estate.

The first Entrepreneur dot com found Las Vegas to be the 4th Best Place for a real estate investment bargain.  They sited a 12% year-over-year population increase and a low unemployment rate. They FAILED to mention the employment growth rate which is the main reason investors are now buying property here in Las Vegas.

The Second article was in Business-week they describe Las Vegas a big city buying opportunity because of its average sales price reduction of -23.38% from last year. Once again they are describing Investors coming to Las Vegas to buy deeply discounted homes an renting them out.

If you will recall a few years ago when the national press focused on Las Vegas an its huge price gains.  The result is that we had Thousands of investors flood into the market and buy property.  It looks like once again the national press is beginning to shedding light on the Las Vegas real estate market as a place of opportunity.  Will history repeat it self? Are the days of deeply discounted homes here in Las Vegas about to change?

I know first had that many international Buyers are currently buying in our market.  I know this because I am dealing with several right now. I read several articles in the foreign news each week about how Las Vegas has become a real opportunity because of the devaluation of the U.S. Dollar coupled with the steep reduction in real estate values.

The bottom line is that in speaking with other real estate agents on the street here in Las Vegas we are all starting to see many more Buyers coming into the market place.  The Greater Las Vegas Board of Realtors is seeing an increase in Sales and properties being placed under contract.  We may be seeing the beginning of a change in the Las Vegas real estate market again. 

Historically the real estate markets in Las Vegas have changed much faster than in other areas of the country.  This would be normal in Las Vegas.

For the Latest in Las Vegas real estate call Max at 702-334-2200. Or email me at:Max@MaxSellsVegas. com. Your comments and questions are welcome.

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Yes, the world of finance is in a tail spin and some Las Vegas condo projects are in trouble but it seems that many Las Vegas projects are above the financing waste land that has swept over the U.S. real estate markets.

This last week I noticed another condominium project has bitten the dust due to the slow market and terrible financing availability.   Stephanie Village has completed an $8 million dollar club house and infrastructure improvements and is now closed for business.  This is the second project to shut down in Henderson in as many months with Vantage Lofts being the first.  One has to ask what will happen to these partially completed projects?

But not all in Las Vegas is doom and gloom.  Las Vegas City last week gave its approval to a non-binding agreement with Forrest City to 1) Acquire land for a casino in the new 61 acre development site the city owns.  2) Build Las Vegas City a new city hall and lease it back at a much reduced rate.  3) Develop a new public transit facility close to the new City Hall.

This would allow the City to assemble approximately 20 contiguous acres of land surrounding the old City hall which would be a very valuable asset for a possible casino project with frontage on Las Vegas Blvd.  This would also guarantee a new casino on the 61 acre development site.  Together two new casino projects with the renovation of the Lady Luck and the expansion and renovation of the Golden Nugget, the new Entertainment District could all make Downtown a must see for people visiting Las Vegas and revitalize the downtown areas.  Besides the new casino on the 61 acre site there will be a new fine arts center, a world class brain institute (under construction),  the world diamond center tower,  the World Furniture Market (3rd phase under construction) and many other buildings.

The City also has not given up on building a new major sports stadium off Main Street between the Stratosphere and Downtown.  Also this month the Streamline Towers Condominium project will start closing its units with their new owners.  Mean while to the south of the new Justice Center Juhl Condominiums continues work on its building complex.  The structure on this project has been fully erected and it is bustling with subcontractors of almost every trade.

Goldman Sachs completed its purchase of the Stratosphere in January and there are murmurings on the street that it will seek to expand and renovate its new purchase using the 12 acres of undeveloped lands it acquired in the purchase.

Just to the north of the 61 acres is the Moulin Rouge, an historic site of the first segregated Casino for people of color back when whites only could stay on the Strip.  This site has recently received preliminary approval from the City for a total new casino/hotel package with tower.

So it looks like old Las Vegas may become New Las Vegas in the next four to six years!

Looking at the County (Strip)  I remember when I was a child the rumors that Elvis Presley really didn’t die but secretly vanished in order to live his life outside the lime light.  Well it looks like Elvis may never die!  FX has announced plans to build a new casino based on the Kings persona on the corner of the Strip and Harmon.  This puts it across from City Center and Planet Hollywood and surrounded by the MGM Grand.  Not bad company Elvis!

Las Vegas Sands has its fingers in a three new projects.

Currently under construction is the new high end condo tower along with luxury retail right along Las Vegas Blvd.  They are also involved in a new major sports arena to be build with frontage along Koval which is the first road east of Las Vegas Blvd.  The third project just announced yesterday is a brand new 1.2 million sq. ft. convention center along with making room for an additional 7,000 new rooms.  This facility would be built on the east side of Koval. 

What I find interesting about all of this is that while the national press is busy saying how bad the residential real estate market currently is in Las Vegas they fail to see the $38 billion dollars of construction currently happening on the Strip which will completely dry up the residential real estate inventories as they finish construction and start hiring new workers.  Supply of homes in Las Vegas will be in short supply in 3 years, AGAIN.

Some Buyers and investors are beginning to see the future and coming back to purchase while prices are dirt cheap.  We are starting to see a lot more buying activity in the residential markets right now.  Many properties in the lower price ranges are beginning to once again receive multiple offers.  It looks like the market here may now be changing.  Historically the Las Vegas real estate market has made fast adjustments to market conditions and this market swing seems to be no different.

If you have any questions please give me a call, Max 702-334-2200

For the Latest in Las Vegas real estate call Max at 702-334-2200. Or email me at:Max@MaxSellsVegas. com. Your comments and questions are welcome.

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Forbes.com rate Las Vegas as a “Top Town for Empty Nesters” in an article published April 3, 2008.  It stated that Las Vegas has had a 156% increase in 55 to 64 year olds from 1990 to 2005.  This has been due to the excellent job market as well as wonderful recreation opportunities.

The State of Nevada recently published its findings concerning the in-migration of new residence for 2007.  It found that over 97,000 people moved to Nevada in 2007 which is over 8,000 new residence per month with the majority living in Clark County (Las Vegas) area.

In talking with other real estate agents on the street here in Las Vegas it appears the market is starting to pick up.  We are seeing more Buyers looking, possibly signifying that prices may be close to bottoming out.  With inventory levels shrinking and more sales pending we may be seeing signs of a bottoming of the market here in Las Vegas.  Keep in mind that we will see significant job growth in 2009 so many Buyers will try to beat the anticipated market appreciation bounce back by buying in 2008.

A major factor in the increase in Buyers is the new FHA purchasing guidelines which have started to allow Buyers to purchase a home.  The conventional mortgage market is still in shambles and has been hard for Buyers to obtain a mortgage.  FHA is allowing Buyers the security and assurance they need to complete their chosen purchase. 

Buyers looking in this market are finding wonderful properties that were well out of their financial reach just 2 years ago.  The selection of prime properties is plentiful and a Buyer can find excellent values for their money.

Now is the time to BUY in Las Vegas.  I am buying properties now.  Does that tell you anything?

For the Latest in Las Vegas real estate call Max at 702-334-2200. Or email me at:Max@MaxSellsVegas. com. Your comments and questions are welcome.

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Well the GLVAR came out with their February figures and it looks like there is a POSSIBILITY (rumor) that the market is showing signs of bottoming out.  Inventory levels are down (fact), numbers of homes under contract are up slightly (fact) and home sales are up slightly(fact).

However Standard & Poor’s/Case Shiller report still show prices falling in Las Vegas (rumor).  Why is this rumor rather than fact? Because approximately 40% of the current housing sales are REO bank auction properties.  These properties are sold as is, generally in need of major repairs and are substandard homes that will have to have renovation and redecorating done to them in order to bring them back to a standard in which they can be resold on the open market.  According to Case Shiller we are off 19% in price from January 2007 to January 2008 and this includes REO auction sales. So by the time these properties are renovated and put back on the market they may sell for 10 to 15% more than they sold at auction for.  Without knowing this the average Buyer thinks they can come along and buy a pristine home at 20% below a year ago which generally is not true.

The recovery in the Las Vegas real estate market will come in conjunction with the completion of $39 Billion dollars worth of improvements on the Las Vegas Strip (truth).  This will ad approximately 46,000 new hotel rooms (false) to the strip and create 276,000 new jobs (false) in Las Vegas.  The number of rooms to be completed between now and 2010 is more likely to be in the realm of 20,000 units creating 4 jobs per room or 80,000 new jobs (rumor).  These jobs are based on not only hotel workers but casino, convention, entertainment, right down to the added grocery bagers that will be needed to service all the new workers on the Strip. Approximately 50% (truth) of these workers will end up buying their home with 2 income workers per home this would mean approximately 20,000 will be absorbed which should be enough to dry up any excess inventories.  It is not enough to drive the huge building boom during the speculation era of just a few years ago.

Many future projects on the Strip may be put on hold or canceled (rumor and truth).  Because of tight financing it looks like old water park site has once again been put up for sale (fact).  This site was once proposed for the  tallest building in the western hemisphere.  The land is owned by Ausie James Packer. Mean while the old site of the New Frontier with recently Clark County project approval to built a expanded version of the New York Plaza Hotel (rumor) may postpone construction until the commercial financing markets settle down. Look for other projects to take longer to move forward as a more measured expansion of the Strip. 

The international tourism will be up over the next few years as foreign currencies buy more U.S. dollars (fact) and this should make Las Vegas a major world stop.  The Las Vegas Convention and Visitors Bureau has just launched a multi million dollar advertising campaign to attract these target travelers (truth). As the numbers on international travel start to show in the market reports and the financial markets settle look for development to once again resume on the Strip (rumor) this will be in about 2010.

Foreclosure on the major projects on the Strip will stop construction and leave empty partially completed mega Casino/hotels (false).  The financiers of these projects understand that if the project is not completed they may not have an asset to sell.  An unfinished project can result in much higher costs to restart and yield them a much lower selling price. A current example of this is the Cosmopolitan whose financier is Deutsch Bank (truth).  The Bank is currently foreclosing on the project but has guaranteed payment to the contractor to continue construction.  If the Bank takes it back, construction will still be completed. Failing to complete a project of this size is not a possibility.

Projects like City Center, Echelon, Fountainbleau, Aliante Station, Canery East, Encore and ”M” will all be brought to completion (truth).

All current under construction expansion to existing properties will also be completed including Ceasars, Palazzo, Planet Hollywood, South Point, and Hard Rock (truth).

As soon as the commercial financing is available the postponed projects will resume development (false).  Las Vegas has always been a city of “If we build it they will come.”  But with all the new rooms coming on line in the next few years there is a little nervousness on the street as to weather they can be filled and generate the needed revenue.  The industry wants a 90% or higher occupancy rate and if that is not reached you will see new development slow (rumor).  Some still appear to be moving forward such as FX’s project across the street from City Center with a planned Elvis themed property.

The Las Vegas housing market will boom in 2010 and prices will return to their 2005 levels (false).  Look for inventories to return to normal levels and prices to rise approximately 10% from their 2008 levels (rumor).  It will take until 2012 for prices to return to their 2005 levels (rumor).

If we have or are about to reach or residential real estate bottom in Las Vegas then it may be a good time to buy.  I bought a home last weekend to rent out.  I guess that lets you know where I stand.

If your interested in talking or have questions please give me a call. Max Schmidt 702-334-2200

For the Latest in Las Vegas real estate call Max at 702-334-2200. Or email me at:Max@MaxSellsVegas. com. Your comments and questions are welcome.

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I tend to spend a great deal of time looking at development on the Strip.  The reason for this is that this area provides such huge employment growth opportunity.  Employment growth is what drives residential real estate development and pricing.  With great positive employment growth of 4 to 5% you find an active appreciating residential real estate market.  With all the development going on down on the Strip this translates into many new jobs and people looking for housing.

This mourning I found out that the 6 billion dollar Plaza Project scheduled for the site that the New Frontier once stood has been rumored to be postponed.  This means that owners and guests at the Trump Hotel will be looking at a dirt lot with an unobstructed view of the Wynn property, a Trump luxury competitor. Trumps units have begun to close with its owners.

But on the same day Las Vegas County Commission gave final approval to the Plaza project. It may be true that construction could be postponed but give Elad Groups deep pockets it would be purly their decision to postpone and not due to commercial financing.

The number of Las Vegas visitors are off 10% in the last few months compared to the previous year.  With all the sky cranes hovering above the strip the possibility of the postponement of the the Plaza sends a clear message to many of us in Las Vegas. 

The Strip maybe over building in an economic downturn (recession) period in the U.S.  We all know that the dollars that flow into our city are discretionary.  The Las Vegas Visitors Bureau moved up an $11 million dollar advertising campaign to help boost visitor attendance.  The target audience is less on U.S. visitor but more on the international market because of the weak dollar and better economies of many foreign countries.

It is also notable that Bruce Eichner developer of the massive Cosmopolitan project has been unable to finalize his bailout deal with Hyatt.  Although Hyatt and another investor already have large capital investments in the project cost over runs may almost double its total from $2 billion to nearly $4 billion.

  In the mean time Deutsche Bank has continued to guarantee payment to the contractor on the project to insure no work stoppages.  Deutsche has also notified all involved that it is proceeding with foreclosure on the project. 

 This foreclosure notice is definitely a move to put pressure on all development Investors to decide if they will continue or loose their investment. 

In the mean time approximately 80% of the first tower condo units have been sold with a non-refundable 20% deposit.  If Deutsche repossess the project do they also take possession of the deposits? Are they required to honor the existing contracts with the condo Buyers? Can they keep the deposits and reset the sales price of the units to the Buyers?   All this is yet to be revealed, but it is clear to me that the project will be finished.  It is to far into the development to stop it even if it becomes an expensive white elephant.  If Deutsche does foreclose it is clear who the most likely Buyer would be as MGM surrounds it with the Belagio and Project City Center.  MGM will not overpay for the project and Deutsche will be picking up the difference.

In other happenings Goldman-Sachs finalized its purchase of the Stratospher, I would not be surprised if its plans may be a little slow in coming as its location will be affected more by slower tourism.  It may very well hunker down and wait out this recession before announcing expansion plans.

The Sahara has gained approval for a new tower and remodeling plans from the Clark County Commission.  Now it must find financing!

Fountainblue is well underway with erecting its steel and seems to be on schedule.

Echelon is quietly proceeding with construction of its $4 billion dollar complex on the old site of the Stardust.

Encore at the Wynn has topped of its project and its new sign is hung. It is scheduled to open in 2009.

Just west of the strip Palms recently opened its new Condo/Tel tower.

Planet Hollywood is under construction of its twin timeshare towers.

Caesars Palace is building an additional room tower on its project.

The newly opened Pallazo is building a condo/hotel tower on its site currently.

Further South on the strip the South Point Casino is building a new expansion on its resort.

The “M” at the extreme south end of the Strip is erecting steel for its new resort.

Also just off the Strip “Hard Rock” has begun its major expansion and remodel.

In other areas The Cannery East is finishing its steel erection on South Boulder Hwy.

The latest Stations Casino at Aliante is proceeding with its interior finishes.

On Fremont Street the Gold Nugget continues with its tower expansion.

The Moulin Rouge has gained approval from the City of Las Vegas for its new tower and casino on the old historic site. But now they must find financing!

It looks like for the most part if the project is not currently under construction it may be delayed until visitor numbers rise and financing becomes available.  This could mean that many projects may be looking at start dates of 3 to 5 years beyond what they had planned.  Some players in this mega game will not be able to hold the land that long while others will be eager to land bank anything that comes up especially at discounted prices.

All this translates into a more reasonable increase in new rooms on the Strip and a slowing of expansion for now.

So what does this mean for the guy buying a house in Las Vegas?

First off it means that job growth will not hit the unreasonable stratospheric heights of 6.5% or higher that some have predicted.  Slower job growth translates into slower absorption of residential inventory.  So if you are a Seller it could take longer to get to a point to sell your home.

In the past I have said that everything should turn around by 2010 and I still believe that to be true.  But I believe job growth in 2010 will be 4 to 5% which is still a large increase.  I still believe that prices will stabilize in late 2008 or early 2009 and start rising in late 2009.  I have never been in favor of short term investments in real estate but I feel for those willing to buy and hold we are in an excellent market to make that deal.  If your interested in buying a home here I have many tools that can help you determine if you are making the proper decision for your needs.  Just give me a call.

For the Latest in Las Vegas real estate call Max at 702-334-2200. Or email me at:Max@MaxSellsVegas. com. Your comments and questions are welcome.

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It appears the the Pinnacle will never peak.  The dual tower condo project 1 mile west of the Strip on Tropicana has been called off.  Look for this zoned high-rise ground to be looked at by casino developers.  It is located across from the Orleans and is just down the street from the Wild Wild West which is slated for Major redevelopment by Stations Group.  Once Stations starts its new facility this real estate will catch the eye of other gaming developers.

Vantage Lofts in Henderson, an upscale mid-rise project with wonderful views of the valley has temporarily suspended construction while the deal with their uncooperative mezzanine lender.  This project is in various phases of development but will definitely finish as the first phase of its 3 phases is 90% completed now.

The Cosmopolitan has found it cash infusion with needed new partners.  This project located between the MGM’s giant City Center and Bellagio never missed a beat in its construction schedule but found itself in a financial crisis as have many high-rise builders in Las Vegas with softer markets and tougher financing.

Speaking of financing and high rises.  It appears that it may be a lot tougher to get that condo you put your money on 2 years ago closed if you need to in the next 6 months or so as many major lenders have instigated much more stringent financing guide lines to invest in Las Vegas high rises.  A few have quit lending on this product altogether.  Get started early if your contract will require you to close soon.

For the Latest in Las Vegas real estate call Max at 702-334-2200. Or email me at:Max@MaxSellsVegas. com. Your comments and questions are welcome.

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Almost everyone in the U.S. is familiar with the roller coaster at the New York New York here in Las Vegas.  Many people who purchased property here in Las Vegas were not aware that they were buying a ticket on a different roller coaster, the Las Vegas real estate roller coaster.  So let us all climb on board and see what this ride may look like.

From about 2003 through 2005 real estate in Las Vegas roared up a steep slope of appreciation powered by speculators, slowing as it crested at its peek in 2006 with an approximate increase of 50%. 

 Most of 2007 was slow decline as the depreciation momentum built pressured by the nations highest foreclosure rate, real estate auctions and people needing to sell no matter what.  With the news around the globe decrying the Las Vegas bubble is bursting it was inevitable that the coaster would accelerate in its downward plunge. The last quarter of 2007 the coaster quickly gained speed and the year ended with a 15.3% average home price depreciation in the Las Vegas real estate market.

In January 2008 repossessions actually exceeded all sales in the Valley and sales for the month were the lowest reported since the 1990’s.  Not surprising another large real estate auction was announced for Bank owned (Real Estate Owned) R.E.O. properties to take place in March.  It seems we are now in full speed free fall in our roller coaster ride.  But when does this coaster inevitably reach the bottom and when does it once again turn up?

With many variables in the market it is hard to say for certain but looking at the variable can give us some sense of what will key a change in our market.

1) If congress passes its second proposed economic relief act (it is an election year) and it includes either or both of the following provisions. This could vastly change the Las Vegas real estate landscape. a) A tax credit of up to $10,000 for first time home buyers to purchase a home. b) The ability of Bankruptcy Judges to modify the terms and conditions of a mortgage loan.  Keep in mind that the Mortgage Bankers Association will fight a bloody fight to stop Bankruptcy modification.  It is also note worthy to mention the the National Home Builders Association has suspended all political contributions to candidates because 1st time home purchase tax credit or the Bankruptcy modification was not in the first economic relief bill.

2) The price of resale home reaches below the $100 per square foot average it cost to build in Las Vegas.  This price includes the price of the lot and is an average price. Some areas such as Summerlin and Anthem are much more because of land costs but looking at the over all picture once the price of resale homes are 15% lower than the cost to replicate them without builders markup, you have a sure fire reason to jump right back into the market and buy.  Ultimately the existing housing stocks will dry up because of job growth and population growth.  It is only a matter of time until once again housing will be in demand and with even minimal inflation rates the cost of building will continue to rise. This will bring investors back to the market and will provide many more positive cash flows for landlords willing to purchase as long term investments.  This would be health investment for the market.

3) Employment growth is anticipated to take off in early 2010 but if some or the current major Strip building projects were to open early this may spur an early bottoming to the real estate market as demand for housing will increase.  There are incentives for the major properties to push their scheduled opening up early if possible.  a) The saving of interest costs on construction loans. b) The earlier addition of revenue streams to offset costs. c) The ability to hire workers before all the other properties open resulting in a better employment pool to choose from resulting in better quality workers.

4) A total turn about in the mortgage industry.  This is a little like suggesting that their will be total peace in the Middle East.  The financing world is all about who you eat, families with homes, smaller banks, hedge funds, and multi-national financial institutions.  The climate of the financing world is much more like a pack of lions praying on anything they can devour than doing the right thing. Greed is the definition of morals for most in this industry.  The motto seems to be win at any cost.  But the tower of cards this greed has built is falling apart.  It is estimated that looking beyond the $200 billion dollars the Mortgage Industry has already written off its books they may well need to write off another $1 trillion in bad debt.  My personal opinion is if they could look under the rock where they hid their morals 20 years ago, gain a little compassion for their fellow man, they may find they could actually help stop this free fall in real estate pricing. This could be accomplished through REAL loan modifications on a massive scale, not the public relations schemes they have dressed up and put in the window with the help of the current U.S. president.  But for this devouring lion pack to change its ways means it would have to put away its prides greed and this is NOT going to happen.

5) Less likely is that the government will buy the defaulting sub-prime and Alt “A” loans and rewrite them into modified loans. It is simply beyond governments function and ability to become the mortgage holder for this much risk and exposure to the average American Tax Payer.

 So when will the roller coaster stop its free fall?  I believe it will happen very soon in Las Vegas and I am putting my money on that bet. Call me if you need to know what is happening in the market.

Max Schmidt 702-334-2200

For the Latest in Las Vegas real estate call Max at 702-334-2200. Or email me at:Max@MaxSellsVegas. com. Your comments and questions are welcome.

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