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Best Post I Ever Read About Vegas Housing Market
It was some Vegas High Rise Living Forum
Great stuff, but you actually paint a rosier picture of the Las Vegas real estate market than is actually the case
Almost all of the nation was down 50%. Vegas is much, much worse than that. You don't need to search too hard to figure this out either because for whatever reason most of the developers left up their old Websites and this information is all available. Most condos in Vegas are not down anywhere near 50%, more like 70% to 75% is the norm. MGM Signature units STARTED at $515,000 and went into the $700s for their small 520 sq. foot studio units, that was the asking price. They now start as low as $120K and go up to about $170K for those units, 4 times cheaper than what they were.
Platinum started in the low $400s, now you can pick up those units at $99,000, more than a four times discount.
The replacement cost to build on the Strip is $300/sq. foot roughly, which means if you're a developer, you obviously want to make a profit for yourself and your investors, so there's no way you're going to build a new building if you can't get at least $450/sq. foot. Frankly I don't think that's a great deal either, as someone who has invested in condo projects themselves, investors want the potential of a 100% ROI in 3 years, 33% a year. No point in going into a risky investment if you can't make a killing if it works out. For every time you make 33%/year, there's another time you lose it all, so you can't be turning a 10% or 20% return on risky investments or it just won't work out. Anyway, bottom line is probably a developer wants $450-500 per square foot back if they're putting $300 into the darn thing.
That means Vegas Strip condos SHOULD be selling at the very least for $400/sq foot, so a 1,000 sq. foot unit should be $400,000. Instead, a unit of that size depending on the building is running more like $125,000 to $200,000. There are a few exceptions, truly premium buildings where the prices didn't get slammed as much (a City Center, MGM Signature price per square foot is still high, just a lot lower than the ludicrous asking prices, or Trump's building, etc.). But overall you can buy in the $100-200 per square foot range, which is truly remarkable.
A lot of the country, the rental market hasn't gone down much at all. I also have an investment in a high-rise apartment building in another state and the rents haven't gone down. In fact we raised rents right through the recession -- plenty of people couldn't afford homes, had to move out of their homes, etc., and it was easy to raise rents in a full building
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