Local Housing Shortage Predicted for Las Vegas

Just as you are getting tired of the nightly news attempting to crush the Las Vegas real estate market, here comes the report about a future Las Vegas housing shortage that we've been predicting in our Blog posts for some time. I guess the news media have decided that real estate bad news makes for higher ratings now than the Irag war news. The irony is that real estate remains a local market with special local dynamics and the news media have never figured that out.

In the Las Vegas local market, the supply is shrinking for luxury high rise condos. This is due to so many cancelled projects over the past three years plus soaring Strip land costs rising from $4 million to $34 million an acre. Developers will tell you that no one can make a profit from building inexpensive luxury high rise condos now.

We've known for some time that the new home builder permits are substantially low for Las Vegas. With over 6,000 people a month still moving to Las Vegas (for 15 years now), it remains one of the most robust and healthy economies in the US. Likewise, with over $40 Billion in construction along the Strip resort corridor, the number of new jobs created over the next three years is in the tens of thousands.

So what is driving this future housing shortage as the news media don't think that is the case in Las Vegas?

For starters, Las Vegas is no longer the old buffet and middle class location it once was. Las Vegas just EQUALED New York City for the total number of AAA 5 diamond awards for fine dining and luxury hotels. It is already projected that in three years Las Vegas will be the #1 city in the US with the most AAA 5 diamond award establishments.

Dubai World's recent investment into MGM MIRAGE's CityCenter further underscored just how international Las Vegas is becoming to the rest of the world. So what does all of this have to do with the local housing shortage prediction? Plenty.

Just this past week we identified that the Las Vegas hotel condo supply has dropped 6% in just the past three months. Savvy buyers are grabbing the luxury hotel condo deals now before the rest of the public realizes the bottom is now. This is one indicator that we have found for you to illustrate how the Las Vegas luxury condo market along the Strip corridor is going to experience stronger demand in the future.

So what are the other indicators?

• Buyers do not want long commutes, especially with soaring gas prices
• There are more single female buyers than every before and they want luxury high rise condos
• Aging Baby Boomer's are increasingly moving to Las Vegas and they do not want the maintenance headaches that come with a single family residence. They only want the luxury condos, especially those along the Strip corridor
• Professional real estate analysts are already predicting demand for luxury high rise condos in Las Vegas is 2:1 over single family homes
• The number of International buyers for Las Vegas luxury condos is increasing dramatically each year, especially with the weak US dollar
• The Las Vegas population will exceed 2 million by 2008 and is still strongly growing with an annual 4% population growth year over year
• New single family home construction permits are down by 39.3% this year
• Longer life spans by retirees is now showing they only want luxury high rise condos
• Increased premium on quality personal time and convenience which living on the Las Vegas Strip in the only luxury high rise condo on the Strip called Sky provides its owners.
• Future water restrictions will be imposed on single family homes as luxury high rise condos return a high percentage of its water back to the recycling water treatment system. Single family homes waste over 40% of the water in Las Vegas just for landscaping irrigation.
• In Sky Las Vegas, out of 409 luxury residential condominiums, only 44 are for resale. That is not Miami as the news media would have you believe. How does 44 equate to Miami's 50,000 and growing inventory numbers for luxury condos?

So what are next steps for undecided buyers for Las Vegas luxury condos? Buy them now as the price per square foot still reflects the land prices of $4 million an acre instead of the current $34 million an acre. Why is this the case? Because so many cancelled projects kept new higher priced supply from hitting the market until 3 years from now then the next high rise condos are delivered.

For example, you can purchase a one bedroom in Sky Las Vegas in the low $400,000's now that if it was being built now and delivered in 2010 like MGM MIRAGE's CityCenter it would cost you anywhere from $600,000 to over $900,000. As the new Plaza in Las Vegas or Palazzo luxury condos get announced for their prices, expect the price per square foot to be even higher. Savvy buyers have discovered these facts and now see recent land sales along the Strip are not showing any reductions in land costs.

Call Bruce Hiatt at (702) 456-7080 x201 PST if you want to buy one of these amazing luxury condos at today's prices. Or, you can wait and pay for the ones to be announced soon at substantially higher prices. Whatever happened to the saying "The Time Value of Money"?