The
Las Vegas strip has not been immune to the big disappointments seen in the housing market over the past few years.
A handful of
luxury condos that were planned to begin construction have yet to break ground. This is a sign that the low to middle income households are not the only demographic feeling the real estate crunch. Condos that were planned to be occupied by some of the nations wealthiest such as George Clooney, Ivana Trump and Charlie Palmer have either been placed on-hold or have been cancelled altogether.
Take, for example, the St. Regis Residences, which was to be situated between the world famous Venetian and Palazzo resorts which stand dormant and incomplete after the developer Las Vegas Sands found itself in financial hardship. In addition, you have the Trump International Tower which has only closed on 23 percent of its nearly 1,300 units. A second tower that was to be constructed on the property has been postponed indefinitely.
An $8.6 billion six-structure development under development by MGM Mirage which is scheduled to open in December has more than a few of its units left unsold, and MGM Mirage expects that they may have to hold on to the units for some time before locating buyers. Other nearby buildings are being modified to be smaller to account for the shrinking market of buyers than there was when the plans were originally developed for the projects, with others simply cancelling construction altogether.
Despite the grim short term outlook, the Mirage refuses to discount any of the units in their CityCenter which will open later this year. Donald Trump has also refused to reduce prices in his building, and has been making up for low sales numbers by renting out unsold units as hotel rooms. They make the case that those who would be purchasing their properties either do or don't have the money, and many of those who do purchase condos in the area usually do so with cash.
Nevertheless, not everyone looking to purchase
Las Vegas real estate has such deep pockets. Many second-home buyers are moving their searches off of the strip and into the suburbs. One individual shifted his original thoughts of purchasing a high-dollar Las Vegas condominium towards purchasing a home just a short drive from the strip. The first day of his search he found a 2,300 square foot three bedroom home with an in-ground pool for only $194,500, considerably lower than its last sale price of almost $400,000 in early 2006.
Many local real estate agents report that more and more buyers are moving their attention off of higher-priced condos on the strip with steep monthly association fees towards suburb homes and going more for the "home away from home" feeling. Just a short drive from the strip and second home buyers are purchasing homes with their own yards and swimming pools for a fraction of the price of a high-rise condo.
Despite recent trends, it is practically unanimously understood that the Las Vegas real estate market will come back just as strong as it was a few years ago, as it is the only city in the world with such a large concentration of multi-billion dollar hotels, casinos and entertainment in such a confined area. One resident says, “Las Vegas is not going to dry up and go away. You give it 10 or 20 years, you’ll do just fine here.”