January 26, 2006

Vegas Condos Go Cold


We reported on this over a month ago. Nice to see Time magazine catch up... Wonder what kind of screaming deals you can get today in Vegas compared to 6 months ago?

Now that several high rollers in the Las Vegas condo-hotel game, including luxury properties linked to 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 - $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. But the intense competition for the city's limited supply of contractors sent construction costs skyrocketing 30% last year, just as lending policies tightened, interest rates climbed and sales started to slow.

Currently, just 18 projects are underway, and nervous developers have called off three high-profile projects over the past seven months.

"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.”

22 comments:

Veronica said...

What happens when developers cancel projects? There are zillions of these multi-million dollar condos scheduled to be built here in Florida, but there can't be that many reckless millionaires living here or moving here to justify the construction.

This sounds a lot like the pyramid schemes of the '60s and '70s. Surely the developers know that the buyers they're targeting are just investors playing Monopoly, and that when all is said and done, there will be hundreds of thousands of gaudy condos sitting empty because nobody can actually afford them.

Does anybody keep track of the number of planned condos and communities versus the number that actually get built? Donald Trump has a tower supposedly going up in Tampa, but after many months, there is no sign of construction.

Anonymous said...

One of the posters, maybe here, says he was an in area in the early 1990's where the developer just called in a bunch of bulldozers to raze the half-finished shells of houses. He's looking forward to it again.

New Housing Sales tomorrow at 10 AM EST. It will be interesting to see if the end-of-the-year promos by Centex et al helped them make the consensus.

FWIW, here is the Weekly Economic Calendar from thestreet.com. "Don't go short without it!"

Wes D said...

Veronica:

The Trump tower is being built in Tampa, it's just west of the AmSouth building and they are working on it right now. There are also some condos going up further along Cass Street.

The developers don't care if the buildings are empty as long as they get out of town with their money. The DOTCOM crash spurred construction of many new office buildings. In the crash these buildings emptied out and many are still sitting empty. Around the Tampa area, there are ENTIRE corporate campuses that are empty today. These newer empty buildings are depressing the prices for other office space. The same thing will happen with condos. With 10,000+ empty condos on the market, prices for every other kind of real estate will be negatively pressured. It's going to be a bloodbath.

Oh in my neighborhood too (Gateway area of ST. Petersburg) another 600 unit apartment complex has just turned into condos. There is way too much supply on the market.

Veronica said...

Actually, the Trump Tower is not being built. The site has been cleared a bit, but nothing is happening.

Other huge projects have even less going on, but the developers claim people are selling their South Tampa homes to move into them. Many of these are in terrible areas and ugly neighborhoods, so why would people living in nice houses in nice areas sell and move into more expensive condos in bad areas, and face even worse taxes ($2,500 for every one-hundred-thousand dollars of cost)? It isn't believable.

The developers claim that these projects haven't moved forward much because they can't get concrete or workers, but I've been to their sites and they use illegal Mexican immigrants, and there is certainly no shortage there.

I don't think one can bulldoze a skyscraper.

I read yesterday that Tampa has millions (?) of square feet of empty office space. My question is, why would anybody build highrise condos in downtown Tampa, when there is nothing in downtown Tampa to do? Are the buyers going to gaze blissfully out of their windows at the dreary old empty office buildings across the street and think how lucky and progressive they are to be living downtown?

Katy said...

Does anyone remember the story a couple months ago about the guy who lived in a shack in Vegas and he kept turning down multi-million offers for his property because he thought the offers would just keep going up? Bet he's regretting that decision now...

If you find the story, could you post? Thanks.

bltserv said...

http://www.msnbc.msn.com/id/9870962/

Left Las Vegas said...

I was just gonna post about that exact same story, but Katy beat me to it. This is Las Vegas for you, where the excessive greed and "we are bubble-proof" mentality run rampant.

I grew up a half mile from naked city so I couldn't help but laugh when I first read this story. If you know anything about naked city it is the section south of Sahara Ave behind the Stratosphere north of the strip, considered the most dangerous area of town, especially back in the 80s.

Converting naked city into some new, upscale resort area is nothing new. When the Stratosphere was built in the early 90s, there were these ambitious plans to buy up all that naked city property behind it to boost its value and revitalize that area. But nothing happened. I still won't go near there, high rises or not.

Katy said...

Thanks, yes, that's glorious.

thehousingfairy said...

ah, no big deal. i expect prices on some on these things to get cut in half -- and they would still be expensive..c'mon, forget all you troubles, c'mon be happy... everybody sing...

Anonymous said...

Phoenix

7/20/2005 10748
7/21/2005 10968
7/22/2005 11122
7/23/2005 11424
7/24/2005 11338
7/25/2005 11112
7/26/2005 11315
7/27/2005 11353
7/28/2005 11390
7/29/2005 11471
7/30/2005 11656
7/31/2005 11609
8/1/2005 11599
8/2/2005 11590
8/3/2005 11635
8/4/2005 11714
8/5/2005 11710
8/6/2005 12196
8/7/2005 12658
8/8/2005 12919
8/9/2005 13244
8/10/2005 13099
8/11/2005 13245
8/12/2005 13389
8/13/2005 13846
8/14/2005 13801
8/15/2005 13607
8/16/2005 13779
8/17/2005 13992
8/18/2005 14087
8/19/2005 14279
8/20/2005 14321
8/21/2005 14457
8/22/2005 14336
8/23/2005 14391
8/24/2005 14529
8/25/2005 14617
8/26/2005 14792
8/27/2005 15011
8/28/2005 14984
8/29/2005 14803
8/30/2005 15042
8/31/2005 15099
9/1/2005 15063
9/2/2005 15159
9/3/2005 15404
9/4/2005 15699
9/5/2005 15621
9/6/2005 15513
9/7/2005 15913
9/8/2005 16106
9/9/2005 16489
9/10/2005 16716
9/11/2005 16609
9/12/2005 16697
9/13/2005 16538
9/14/2005 16900
9/15/2005 16952
9/16/2005 17419
9/17/2005 17583
9/18/2005 17577
9/19/2005 17636
9/20/2005 17516
9/21/2005 17664
9/22/2005 17883
9/23/2005 18226
9/24/2005 18204
9/25/2005 18196
9/26/2005 18435
9/27/2005 18483
9/28/2005 18605
9/29/2005 18604
9/30/2005 19192
10/1/2005 19333
10/2/2005 19316
10/3/2005 19362
10/4/2005 19463
10/5/2005 19562
10/6/2005 19670
10/7/2005 20052
10/8/2005 20219
10/9/2005 20153
10/10/2005 20324
10/11/2005 20470
10/12/2005 20668
10/13/2005 20850
10/14/2005 21238
10/15/2005 21446
10/16/2005 21463
10/17/2005 21527
10/18/2005 21588
10/19/2005 21795
10/20/2005 21806
10/21/2005 22302
10/22/2005 22719
10/23/2005 22769
10/24/2005 22806
10/25/2005 22976
10/26/2005 23132
10/27/2005 23293
10/28/2005 23681
10/29/2005 23805
10/30/2005 23816
10/31/2005 23790
11/1/2005 23601
11/2/2005 23665
11/3/2005 24193
11/4/2005 24579
11/5/2005 24786
11/6/2005 24717
11/7/2005 24937
11/8/2005 25244
11/9/2005 25333
11/10/2005 25387
11/11/2005 25700
11/12/2005 25685
11/13/2005 25773
11/14/2005 25945
11/15/2005 25913
11/16/2005 25884
11/17/2005 26261
11/18/2005 26098
11/19/2005 26662
11/20/2005 26688
11/21/2005 26684
11/22/2005 26488
11/23/2005 26776
11/24/2005 26819
11/25/2005 26855
11/26/2005 26871
11/27/2005 26890
11/28/2005 26979
11/29/2005 26811
11/30/2005 26797
12/1/2005 26792
12/2/2005 26915
12/3/2005 27238
12/4/2005 27295
12/5/2005 27356
12/6/2005 27387
12/7/2005 27403
12/8/2005 27367
12/9/2005 27649
12/10/2005 27706
12/11/2005 27664
12/12/2005 27512
12/13/2005 27411
12/14/2005 27566
12/15/2005 27517
12/16/2005 27603
12/17/2005 27791
12/18/2005 27776
12/19/2005 27722
12/20/2005 27604
12/21/2005 27554
12/22/2005 27516
12/23/2005 27486
12/24/2005 27311
12/25/2005 27014
12/26/2005 26810
12/27/2005 26822
12/28/2005 26687
12/29/2005 26649
12/30/2005 26547
12/31/2005 26497
1/1/2006 26462
1/2/2006 26401
1/3/2006 26751
1/4/2006 27403
1/5/2006 27564
1/6/2006 28224
1/7/2006 28337
1/8/2006 28542
1/9/2006 28595
1/10/2006 28786
1/11/2006 29222
1/12/2006 29507
1/13/2006 29689
1/14/2006 29899
1/15/2006 30415
1/16/2006 30391
1/17/2006 30707
1/18/2006 30817
1/19/2006 31085
1/20/2006 31457
1/21/2006 31463
1/22/2006 31497
1/23/2006 31607
1/24/2006 31766
1/25/2006 31830
1/26/2006 32142

ECOBUILDER said...

Ho, ho, ho ......
It's just started, guys.

Homebuilders use different incentives to sell their houses:

(money.cnn.com/2006/01/26/
real_estate/giving_it_all_away/index.htm

* paying the heating bills for six months to anyone who buys a home;

* trips to Las Vegas, home- entertainment and security packages, furniture store gift certificates, golf club passes for a year -- even swimming pools.

* Granite countertops, commercial quality appliances, and wine storage all appeal to buyers. A relatively new option, bamboo floors, has recently emerged as a deal maker.

* Lexus (for two years) with the sale of an existing home.

* giving away jewelry.

* giving away a two-year lease on a Volkswagen Beetle.

* free-gas fireplace, hardwood floors, upgraded cabinets, and a washer/dryer -- and a 42" plasma TV.

Let's help them, folks !!!!

Propose your incentive !!!

How about "Buy now and dont pay until 2007"?

keith said...

anon w/ phoenix numbers - what site do you use to get the daily listings? I see weekly, but that daily one is beautiful (beautifully ugly)

Grinch34 said...

anonymous said listing numbers for Phoenix.

Keith beat me to it, but I have to agree with him. Thanks for the info.

answer-man said...

ps I'm having a little trouble sending comments so if I do it twice please excuse me and I apologize.

Alicia Bennett said...

Hello, Just wandering the blogosphere and here I am at your blog. I enjoy the style of how you have put it all together. I'll be coming back again.

Regards,

myrtle beach condo

Anonymous said...

Cyber-wandering and looking for something that might help my own real estate business. Stumbled across your blog and enjoyed the visit. Thanks for the read. Visit my site if you have a chance.

Anonymous said...

Surfing for information on real estate, and I stumbled across your blog. Interesting work. Good read. Visit my site if you have a chance.

Greg said...

employee books what about it..employee books

Anonymous said...

Your blog was fun to visit. Not exactly what I was looking for. But fun. BTW, while the broad brushstrokes of successful marketing remain the same on the cyber battlefield of selling homes today, the rule book has changed. That's what we deal with on our websites. ... .

Anonymous said...

The average home is currently on the for about 4 months before it goes to contract. Around 15% of initial real estate contracts never make it to a successful closing ... something goes wrong, and the frustrated seller puts the home back on the real estate market .

Anonymous said...

With the , you don't have strangers coming through your home, day after day, often week after week, at times which are not always convenient. Your home must look great ... truly great ... for one weekend only .

Anonymous said...

your sitegranite was interesting. here is myhttp://www.usend1.net.or go to it from here granite