The Review Journal reports from Nevada. “The only thing missing from real estate consultant Steve Bottfeld’s presentation Thursday at Crystal Ball 2007 was his cheerleader outfit. ‘I don’t care what anyone says, prices in Las Vegas will continue to rise,’ Bottfeld told 1,100 real estate professionals.”
“Larry Murphy of SalesTraq said a ’scary stat’ is that 44 percent of the 20,000 listings in Las Vegas are vacant homes. ‘Who lists a vacant home? Predominantly investors,’ he said. ‘That’s one thing that’s going to moderate real estate prices this year. Without these vacant investor homes, prices would be through the roof again.’”
“Bottfeld said none of the naysayers are talking about the vertical market in Las Vegas, some 23,000 high-rise condo units that are going to redefine the market. ‘We’re creating this atmosphere of fear from nonsense, from negative national press,’ he said.”
“‘What happened is we started the transition from a suburban market to an urban market and with transition, certain things happen. Twenty percent of all Vegas home sales go to investors and second-home buyers, which are one in the same. I don’t separate them. In the last two months, investors have fled from resale (homes) to vertical. The sky is not falling,’ he said.”
In Business Las Vegas. “The demand for land has softened in the Las Vegas Valley as property owners continue to hold out for prices that speculators and developers, especially homebuilders, are finding less and less palatable.”
“That’s the assessment of Brian Gordon and Jeremy Aguero, principals of Applied Analysis who this week released the latest figures on land transactions. Demand dropped sharply in the fourth quarter, down nearly 68 percent from the same period in 2005 and off 33 percent from July through September of this year.”
“Sellers aren’t getting the prices that they believed they would get six to 12 months ago, Gordon said. Anyone who bought property recently isn’t willing to cut prices to take a loss, but property owners who have a lot less invested have been unwilling to cut prices even though they could do so.”
“‘We see a similar concept in the resale home market where home sellers are unwilling to cut prices and buyers are unwilling to pay premiums at the moment,’ Gordon said. ‘Over time, that should correct itself.’”
“Several land owners have been seeking high density valuation for their properties, many of which are no longer feasible because only so many mid-rise and high-rise projects can be built, Gordon said. But he added that ‘reality may be setting in for many of them’ over what they can charge.”
“Metrostudy’s Las Vegas division reported that vacant developed lot inventory remained abundant. At the end of 2006, there were 34,066 vacant developed lots, an increase of 11.7 percent compared to 2005.”
“‘In the face of reduced demand at current price points, builders have pulled back on production in an effort to move units off their balance sheets,’ said Metrostudy’s Josh Seime. ‘In order to expand margins from current levels, market strategies will need to evolve to reflect market conditions.’”
“Centex Homes, a national homebuilder which last week announced its first-ever quarterly loss, has pulled out of its deal to build a 2,200-acre master-planned community in Henderson.”
“In early January Centex sent LandWell a letter terminating its agreement, but left the door open to a deal with a reduction in pricing. Now, the door has been closed completely.”
“‘Given overall market conditions, Centex Homes recently made a decision not to move forward with its involvement in the LandWell project,” said Caroline Doyle, Centex VP, in a statement. ‘We made a business decision to redeploy our capital to support other projects that will produce better results in the near-term.’”
“With its financial difficulty, Centex announced last week its plans to cut 13 percent of its homebuilding workforce to improve its balance sheets. The company had already reduced staff 17 percent through the end of December, including staffing in Las Vegas.”
“In September, Centex announced it had dropped land options in Las Vegas and in October Centex Destination Properties pulled the plug on a $1.5 billion, 2,400-condominium project south of the Las Vegas Strip.”
“Centex has more than a three-year supply of land, even after the company walked away from 40 percent of its options nationwide, the company announced last week. It planned to decline options on another 40 percent in the first three months of this year.”
“Mark Paris, the CEO of LandWell Co. declined to say how much money Centex forfeited by pulling out of the land deal. The company also contributed money to the planning process, he said.”
“For residents of the $350 million, 45-story Sky Las Vegas condo tower set to open this spring, a dark shadow is looming on the horizon”
“To the disbelief of many owners of the 409-unit luxury high rise on the Las Vegas Strip, the Clark County Planning Commission has given its blessing for the Maxim 300-room hotel and casino and 1,860 condominium units just south of Sky Las Vegas.”
“‘It looks like a wall of towers,’ said Bruce Hiatt, a broker who along with more than 34 clients bought a condo at Sky. ‘My clients are outraged, and they are sending letters left and right (to commissioners) protesting this and demanding a public hearing and sitting down and talking because it’s almost like putting a wall in your face.’”
“The Sky Las Vegas condos are priced between $700,000 to in excess of $4 million. More than 50 units remain for sale.”
“Hiatt said owners who paid $1 million or more for a condo in the corner that has a southern view of the Strip will apparently have those Times Square-like views blocked. It also appears the Maxim project will take away sunlight from the tower and pool, residents said.”
“Chris Kaempfer, whose firm seeks entitlements for Las Vegas Valley projects, including Sky Las Vegas, said views, shadows and sunlight aren’t protected and said that it’s considered an inescapable consequence of growth. ‘Clark County commissioners have taken the position that views, especially on the Las Vegas Strip, are not a protectable interest,’ Kaempfer said.”
“Avis and Elliot Titcher of Philadelphia, who plan to use their condo as a second home, said they chose their unit for its views of the Strip and mountains. ‘Since our unit would be overlooking Maxim, it is a real possibility we would have to keep our shades drawn as people could look into our apartment,’ the Titchers wrote. ‘That is totally unacceptable.’”