Originally published February 23 2006
Las Vegas luxury real estate market slows down
by Mike Adams, the Health Ranger, NaturalNews Editor
Las Vegas developers are scaling back on new luxury condos, in the wake of tighter lending policies, increasing interest rates, slower sales and higher construction costs, driven up by competition.
Now that several high rollers in the Las Vegas condo-hotel game, with properties linked to the likes of Michael Jordan and Ivana Trump, are either folding or selling their holdings, a growing number of players are losing their taste for big bets on high-rise residential real estate development.
Over the past two years, as high-rise fever spread across town, prices for the luxury apartments ballooned, fetching as much as $500 to $1,000 a square foot---or up to $1.5 million for a one-bedroom--- at the peak.
Buyers, mostly interested in flipping them for quick profits, eagerly anted up five-figure down payments, while developers planned more than 70 luxury towers holding a total of about 43,000 units on or near the Strip and downtown.
Brian Gordon, a principal at Applied Analysis, a real estate research firm, says the developers with experience building luxury high-rises, whose properties are located on or near the Strip and carry a strong and recognizable brand name--- such as Donald Trump, Hard Rock and MGM Grand--- are the ones playing winning hands in Vegas now.
Back east, the luxury condo markets that have had similarly explosive growth in Miami and New York, where high-end apartments can command from $2,000 to $4,000 a square foot, haven't slumped yet.
Still, experts say the abrupt reversal of fortune in the desert, where the mainstream residential real estate and hotel markets are still quite healthy, shows just how quickly the odds can change in even the most affluent markets if runaway speculation and overzealous development take hold.
The days of the two guys from the East Coast or Canada coming into town and promoting a condo development with a website and a dream are over."
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