Credit for housing mortgages now takes longer for luxury condo buyers in Las Vegas real estate. Condo hotel units are currently appraised at a significant discount from the contracted price several years ago. Some units are valued 30 percent less and the mortgage lender is lending on the current appraisal. Most Las Vegas condos on the Strip had a deposit from 20 to 30 percent down.
Buyers are now in a very tight credit situation trying to secure mortgages with stricter guidelines. Large deposit have been sitting with the real estate developer and current appraisals could be several $100,000 less than contracted price. Will they be able or want to make up the difference? That’s a question for both the real estate buyers and speculators. Many have decided to walk away from their investment.
Towards the end of September, 2008, Deutsche Bank reports 342 of the units at Palms Place and approximately 270 have closed sales at Trump International Hotel & Tower Las Vegas. Closings started eight months ago.
Real estate investors are now faced with banks asking for exceptional credit and up to 50 percent down with a paper trail for the down payment. The only way to achieve a lower rate could be to accept an adjustable rate mortgage. The mortgage rules have completely changed.
Trump Las Vegas has had several buyers lose their deposit by canceling their contract but Palms Place condos have completed their deals. Palms Place condos that have closed have had 28 units valued at more than $1 million and the total condominiums range in price from $378,000 up to $4.5 million
Both developments can be operated as a hotel rental in the condo hotel project. The unsold 250 rooms in Palms Place can’t be included in the hotel inventory.
Credit for housing mortgages now takes longer for luxury condo buyers.