Las Vegas "Strip" is raking in California money, but this time it isn't from poker chip gamblers -- it's homebuyers trying to cash in on the area's new high-rises.

"If you are looking to be close to the strip, high-rises are the up and coming investment in Las Vegas," say Realtors Pete and Terry Slater. "There are over forty new residential high rises being built, or on the drawing board. Trump Towers, The Majestic (Conrad Hilton), Newport, Turnberry and many others are being developed. In the Las Vegas market, because of the scarcity of land, the buildings are going up to accommodate the influx of people moving into the valley every month. The demand is there and whoever may think we are overbuilding will find out that the area will just continue to grow for years to come. It's a resort destination, and if you build it, they will come."

Advises Realtor Bruce Hiatt, "Don't underestimate the strength of this emerging luxury condo market. This is a world market unlike other areas of Las Vegas that tend to be California-driven. Currently, most of our buyers are coming from New York, Miami, London, Hong Kong, Tokyo, Taiwan, South America, Middle East and Canada. To an investor in Europe or Asia, when you factor in the currency exchange, our luxury condo market is a real deal, and that means upside strength at our current price points have the potential to be here for some time. Of course, no one can predict the future, but trends do give us guidance. Don't wait to be last in line for this fascinating and unique new real estate market."

"We have said for months that looking at other more mature luxury condo markets like Miami, Chicago, Toronto and New York, you will see a statistical trend that very likely will occur in Las Vegas," adds Hiatt. "Prices for luxury high-rise condos with good locations in these markets illustrate that $1000 to over $2000 a square foot is common according to luxury real estate agents in those markets."

"There is still a very slight edge for buyers at this point, especially with properties that have been on the market for any length of time," says Realtor Debbie Drummond Thompson. "But the outlook for the future is changing. In general, new home sales over the past 12 months have exceeded the number of new home permits builders obtain to begin construction by nearly 1,500 units and currently the monthly demand for new homes is around 900 units ahead of what builders are delivering. At the same time, the median price for a new home increased to $311,525 in May. Larry Murphy, President of Sales Traq estimates that the median new home price, excluding condo conversions will reach $340,000 by the end of 2005."

"What does it all mean? In the Spring of 2004, there were long waiting lists for buyers wanting to purchase new homes," Drummond explains. "Those who couldn't or wouldn't wait six months turned to the resale home market. In addition, investors who were hearing of the new home shortage combined with increasing prices also entered the resale market. For many, the result was not pretty. In April of last year, there were just over 2000 listings on the Multiple Listing Service. Buyers frequently paid more than the list price and waived appraisal contingencies just to purchase a home in the "hot" market. Ultimately, more homes went on the market as sellers decided to cash in on their capital gains. By October there was a glut of listings and prices began a gradual decline. In general, the prices went down about 5 percent from their peak and now the market has stabilized. The Greater Las Vegas Association of Realtors reported that Las Vegas showed a one percent appreciation for the month of May. Figures for June haven't been published at this point. However, if the current trend of fewer new home permits being pulled by builders continues, within the next 12-24 months, Las Vegas and its surrounding communities will likely experience another cycle of home prices appreciating by as much as 50 percent in a year."

Drummond adds, "The healthy, growing economy in Southern Nevada will only help prices remain strong. Recent reports showed that seasonally adjusted unemployment is only 4.0 percent here. That compares to 5.1 percent nationally and 5.4 percent in California, sorry, Arnie) I have personally noticed another indicator that our market is beginning to take off again. Over the past weeks, I have seen more investors coming in to bid on properties. The investors I have been seeing are not the speculative variety hoping to purchase and make a profit a month later, but the type who are looking for healthy appreciation over the next two to four years. Barring a sudden downturn in our economy, I believe the investors will see the appreciation they're seeking."

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Published: August 9, 2005

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