Las Vegas’ luxury condominium market slowed in the second quarter as a result of condo project cancellations and suspended sales. There were 135 projects proposed totaling 91,934 units at the end of June, yet only 14.6 percent of those units were actually under construction, reports Applied Analysis, a Las Vegas-based business advisory firm.
An estimated 6,900 luxury condo units had suspended sales, while another 1,900 units had officially cancelled.
“It would be impracticable to believe the Las Vegas real estate market could absorb the entire potential inventory in the market today,” said Jeremy Aguero, principal of Applied Analysis. “Several projects have witnessed a material decline in the number of investor purchasers.” Speculative plans made-up 55 percent of the market in the second quarter. Only 2,300 units were already pre-existing, including Turnberry Place, Metropolis and Park Towers at Hughes Center. Condo Pre-sales, meanwhile, accounted for 17.7 percent of market at the end of last month.
While the market for Las Vegas luxury condos doubled in size over the last year, less than 25 percent of all projects have broken ground thus far.
“While projects that are currently under construction have reached the critical mass in terms of sales to provide sufficient financing, the remaining units vying for potential buyers will either prove their ability to move forward in the 12 months, or not,” said Brian Gordon, principal of Applied Analysis. “Construction cost dynamics and consumer perceptions about extended sales periods decrease the likelihood for success for many of these projects.”
And there is also an active resale market by investors and speculators looking to sell the units. There were 246 existing condo homes for sale in Las Vegas listed for sale in the second quarter, with an average asking price of $1.1 million or $631-per-square-foot.
“A significant number of these projects have failed to move forward as originally proposed, calling into questions the number of units that will actually reach the market during the next five years,” Gordon said. “The number of luxury condominium projects programmed in Las Vegas remains high, yet those projects actively marketing remains only a fraction of the inventory potential.”
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Source:LV Business Press
The market stats for Las Vegas luxury condos.