LVRJ Article Strip Condo Market Makes Comeback

LVRJ Article Strip Condo Market Makes Comeback

ou already know your neighborhood real estate market is going crazy. But did you know the Strip is catching up? The last six months have brought a sales frenzy to the luxury high-rise condominium market on and around the resort corridor, with rising prices and tightening inventories we’ve seen in the city’s popular master plans. In the last six months, 206 condos going for as much as $400,000 each closed after fewer than 60 days on the market.   That pace is unheard of at a price point and home type that typically averages six to 12 months on the market. What’s more, available supply has crept down from five months in January to less than four months now. There are even multiple offers on properties in the $300,000 to $400,000 range. “We’re basically moving into what qualifies as a tight market,” . It’s a radical change from 2008, when the Strip market crashed and left a glut of more than 1,000 units. Local research firm SalesTraq showed a 3½-year supply of condos back then, as jittery investors backed out en masse before closing. It was that moribund market that welcomed CityCenter’s Veer Towers. The project, which opened in 2009, sold roughly a third of its 670 units before closings stalled. Developer MGM Resorts International cut prices, which started at $500,000 and went up to $12 million, by 30 percent in late 2009, and by anOther 25 percent in early 2012. Still, sales struggled: The two towers moved just 10 units in 2011, and six in 2012. But things are different today: Veer sold 70 units in the first half of 2013, including 14 in June alone, according to Pordes Residential Sales & Marketing, which is selling the towers for MGM Resorts. Thank a surging stock market for part of the turnaround, said Jim Navarro, Pordes’ vice president of residential sales and marketing. The Dow Jones industrial average has more than doubled, from 6,547 in March 2009 to 15,522 on July 29. That wealth effect means more people feel they can buy, Navarro said. A big rebound in California real estate has helped, too, because about 80 percent of Veer’s buyers come from the Golden State. Buyers are also streaming into the market from New York, Arizona, Washington, Europe and Asia, Hiatt said. But there’s a twist in this submarket revival: Cash buyers — read: investors — continue to dominate among suburban buyers, making up nearly 60 percent of purchases. On the Strip, just 15 percent to 25 percent are investors, depending on the project. At Veer, for example, 75 percent are buying a vacation home rather than a place to rent out for cash flow, Navarro said. The improved sales are sustainable, at least in the near term, observers said. For one thing, supplies will stay limited, because no one’s building or planning any new high-rises, Navarro said. Plus, as Genting Group’s Resorts World Las Vegas and Other big Strip projects get started or near completion, confidence will surge, Hiatt said. “People want to see confirmation of more investment on the Strip. Seeing (Resorts World) start up will definitely be a catalyst for people jumping back in,” he said. ■

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Dated: August 15th 2013
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