Brokers ‘Left Hanging’ Over Defunct Condo Projects
The Las Vegas Review Journal reports on the fall-out from failed condo projects. “Broker Beverly Lacey will show high-rise luxury condos to clients if that’s what they want to see, but she feels obligated to warn them of the challenges and pitfalls exposed by Las Vegas projects that have fallen by the wayside. Lacey said she was heavy into sales at Krystal Sands and Aqua Blue last year when developers canceled the projects. It cost her about $200,000 in commissions.”
“‘You’ve got to roll with the punches. Yeah, I ate it for a couple hundred thousand in commissions, but you have to move forward,’ she said.”
“Lacey is among a handful of brokers who worked long hours catering to clients and building relationships with developers only to be left hanging over defunct projects such as Krystal Sands, Aqua Blue, Hard Rock Hotel, Ivana Las Vegas, and Icon.”
“Several lawsuits alleging breach of purchase contract have been filed on behalf of buyers as a result of the Las Vegas high-rise fallout. Most brokers will never see payment. High-rise failures in Las Vegas reverberated to Wall Street, where financial institutions have become more leery about making construction loans. The failures have also put a crimp in brokers’ bank accounts.”
“Broker Bruce Hiatt said he only sells condos that pay advance commissions early in the process; commissions are nonrecourse, meaning they don’t have to be paid back if the project fails. ‘Very few can play in that game,’ Hiatt said. ‘This way we..earn at least part of the commission if the project doesn’t go forward. It’s time the high-rise developers realize the game rules have changed and luxury high-rise brokers are onto the game of the land flippers.’”
“Hiatt said he felt misled by developers who used his time and services to pump up the value of their land to flip it. Such situations caused agents to ‘lose face’ with their buyers, many of whom became disenchanted with Las Vegas after their negative experiences.”
“A number of top-producing brokers got stung when Related Las Vegas canceled Icon in January, said Paul Murad, developer of the proposed Gateway Las Vegas high-rise in downtown Las Vegas. Some of the brokers had purchased units and were anticipating appreciation gains. Others had clients who bought at Icon and they were counting on commissions and making purchases based on future earnings, Murad said.”
“‘Realtors were confident that their payday would arrive because companies like Related seldom cancel publicly announced projects,’ he said.”
Long-time readers know this blogs contributors used to guess what the end would be for LV condo towers, because even at the top of the frenzy, many experts said most would never be built. Now we know; lawsuits, lost commissions and hard feelings.
This is becoming a busy week for the bubble stories isn’t it? Seems like there is starting to be some capitulation by both the MSM and the NAR all happening this week.
Except it’s still much closer to the beginning than the end.
Ah yes the beginning!!! I quote Winston Churchill “This of course is not the end nor it is the beginning of the end, however it is a beginning.”
Some of the brokers had purchased units and were anticipating appreciation gains.
Nope, no bubble here.
Hiatt is not wasting too much time licking his wounds. Here is his latest advice to his would-be condo buyers, from the Realty Times web site:
“RUN, JUMP, RACE to buy the condo-hotel resales in MGM Signature Tower A.”
http://realtytimes.com/rtmcrcond/Nevada~Las_Vegas~brucehiatt
Note that Hiatt is only bullish on downtown Vegas condos, not SFH. He says that single family housing in Summerlin is overbuilt and “seeing some loss.”
Sorry, OT, but…
I’m calling it over in Viriginia Beach
(and a question)
Housing tracker is out again today. I’ve been watching the 75th percentile homes, because in the bubble areas that have already popped, it was the more expensive homes that went first.
On 9/1/5, the 75th percentile home went for $539k. As of today, it goes for $539.9k (after a runup to over $570k at the beginning of March). Inventory continues to increase.
Also, separately, my tracking of Va Beach condos show the median price has decisively retreated from $300k, down under $390k for the second or third week, again with increasing inventory.
That’s enough of a turn for me to call the market: it’s done.
Now, my question: am I talking to myself? I know of only one person who has indicated they are following these statistics, so if you’re from the HR area or nearby, and you pay attention to my occasional posts, now would be a good time to un-lurk and let me know because, to be honest, otherwise it doesn’t seem worth the effort. Thanks
Sorry, condos down from $300k to under $290k etc….
I look at the stats. One more piece of information .
I’ve been watching the numbers also. Be aware that the housingtracker site is getting data from Realtor.com, and not the local REIN / HRMLS system. That system is private (even interested parties have to pay a monthly fee to access the full specs on houses when browsing).
There is most likely WAY more inventory than listed on HousingTracker. Once in a great while, local realtors will list the numbers over on the RealtyTimes market conditions. When someone over there posted real numbers they were much higher than HousingTracker, and this was during good times.
I notice very large numbers of for sale signs in Norfolk and Virginia Beach. I was out visiting a friend in Suffolk, VA on Sunday and there was a large number of forsale signs in front of his hood. It was photogallery worthy, but I broke my digital camera last week and the replacement LCD hasn’t arrived yet. I think they purchased in their hood for $150kish some 5 years ago, and now people are asking $300k+ easy. Median salaries haven’t kept up with inflation, and we’ve got a number of layoffs at NASA Langley (happened) and Ford Motor plant (in year or so).
Good to see other locals on here! I’ve been watching for a year and a half or so.
I’m still watching too, baka, thanks for the insight.
By the way, VaBeyatch, you no longer have to pay to get the full housing specs on hrmls.com; they did away with that as of June 6.
Ah okay, I knew the Realtors were not happy with the MLS payment system. I haven’t looked at it in a while. Generally I get really angry with what I see.
I tend to cause trouble on the Norfolk Craigslist for-sale forums, but now there is a group of realtors sitting by waiting for my every post to flag it into oblivion. I get private emails from people that are in agreement though, and some hate mails from sellers threatening to beat me up.
I took an interest in the housing bubble, as I actually started getting close to where I could afford a resonably priced house, the prices in turn went crazy. The place I was renting (2600sqft 4 bedroom for $1350/month) would have sold for around $170k in 2003, would now carry an asking of $300-400k. Out of line, considering I do “better than median.”
A simple check it just to ask people if they could afford to buy their homes now. They almost always say no.
I have a N. VA friend who bought two rental townhouses down there in VA Beach. Not a beach property, just an inland property. She’s really stretched and is probably “feeding the alligators”. She has another vacant new home nearby. I wouldn’t waste my time if I were you, causing trouble at craigslist. Just spend your time saving your money and being thankful you didn’t buy at 400K.
Yea, I’ve come to the conclusion that Craigslist (the Norfolk housing for sale) is pointless to troll. I think it’s all sellers.
I gave up trying to talk sense into the people on San Francisco Craigslist. It’s all ad-hominem attacks now, anyway. “Bubbleheads” telling “Housingheads” they are about to lose everything. HH telling BH they are poor bitter loser renters. Blah blah blah. It’s a waste.
“[Craigslist HOFO is] a war with no battles, no monuments, only casualties.” - Cpt. Marko Ramius
It appears to be a challenge to to find accurate info on the housing stats. I follow the tracker for Boise and inventory has climbed way up- but the local RE crowd says inventory is down from last years?
The other days I counted listing on two FSBO sites- another 750 listings. Also, the housing tracking for Boise excludes 1/3 of the valley (Nampa Caldwell) where some of the highest growth is.
Thanks, Beyatch (and Wizard and RDW)
I don’t care if the data has bias, as long as it’s a consistent bias. Since I use two sources, track two areas 40 miles apart, track two types of housing, and micro-track 1 development in Williamsburg and more informally 2 in Va. Beach, AND I’m 1 month away from YoY data — I get probably 99% of what I would get from unbiased data.
Still would like to hear from any other poster/lurker who pays attention to these HR stats. Thanks
By the way, heard an ad for a mortgage company on the radio this A.M. Evidently, “the Hampton Roads housing market is sound” and “interest rates are still low” so now is a great time to buy.
Apparently, we’ve all had it wrong this whole time.
This is an OUTRAGE!!!
I’m establishing a fund to help out the poor Brokers who lost big because of the nasty shenanigans by the developers.
Anybody want to contribute??
Contribute to a fund for brokers?
Sure, put me down for a big bag of Fu*k you. Let me know where to send it too.
Bwwwaaaahhhhaaaa. I take it your point is live by the sword die by the sword. I couldn’t believe that lady actually told a reporter she lost 200k
People are strange when they lose, especially when they lose big. I learned to keep my mouth shut after the internet stock debacle. Folks at parties would get together and have verbal competitions about how much they lost in the market.
“You rode Lucent from $100-$5? Ha, I rode Juniper from $225-$25 and bought all the way down!”
Man people are weird when they get beaten like dogs. I just hope these loanowner types aren’t of the rabid variety.
“Hiatt said he felt misled by developers who used his time and services to pump up the value of their land to flip it. Such situations caused agents to ‘lose face’ with their buyers, many of whom became disenchanted with Las Vegas after their negative experiences.”
Awwww, poor Hiatt… We wouldn’t want him to have to feel what it’s like to have been taken advantage of now would we? Serves you right you cockroach! You’ve been peddling these overpriced pieces of shit to more unsuspecting buyers than one could keep track of. It’s about time you got burned too!!! AAHHHHAHAHAHAHAHAHA!!!!
Thanks A-hole, now I have to buy a new keyboard.
Don’t drink and blog. It’s the law.
Or eat and blog. Especially chili.
I have uncleanable chili spatter on the wall behind my monitor. That was Get_Stucco’s fault. And I ruined a wireless keyboard after reading a MrIncomeStream post and losing containment on a mouthful of cafe mocha.
Some of the people here are riots. SoCalMtgGuy and Auction Heaven on 07 used to post a lot more than they do now. I miss those peeps - and others.
Sure, they can count on someone like me! When I can count my Total SAVINGS by waiting and NOT buying since 2003
I can help. Want a rope so they can hang better?
it seeems like a market in transition,to bankruptcy.
for what it is worth 840,600 today, last saturday 836,471 and 5/15 799000
http://www.ziprealty.com/maps/index.jsp?usage=search&cKey=74rbwvlk
the commissions these brokers make considering the work they do is quite laughable. i have no sympathy as you win some you lose some. if the market was regulated that $200k commission would be more like $40k
The market is regulated.
I wonder how TRUMP is doing with his LV tower project.
Which cancelled Las Vegas condo project?
You mean the canceled Icon Towers project?
http://tinyurl.com/gczvk
Or Las Ramblas condotel and casino?
http://tinyurl.com/f2noy
Or these?
In Las Vegas alone, developers have canceled at least four other buildings in the last year, including one called Aqua Blue that was to contain a Michael Jordan health club. Dozens of other buildings, in which units have been sold, may never break ground, said Brian Gordon, a principal at Applied Analysis, a Las Vegas consulting firm. Mr. Gordon said there are 97 condo projects in the works in greater Las Vegas, representing more than 52,000 units.
“I don’t think anyone would expect that all these projects will move forward,” Mr. Gordon said. He predicted that fewer than half of them would be built in the next five years. Of course, if the market cools enough, some buyers may be happy to get their deposits back.
http://tinyurl.com/htntv
Yes, I’m sure you must mean those condo projects.
LOL! I took a golf trip to Vegas a little over a year ago and I remember seeing the ads for the Aqua Blue complex in one of the hotel area description books. It was a big glossy ad and one of the ugliest looking building I have ever seen. If I remember correctly I think it was a double tower design.
Remember to always was your hands after reading those hotel books because I always read them on the crapper and who knows where I’ve been!
I also know now why some pages from those books are missing.
LV Landlord ……where are you ?
LV Landlord is curled in a fetal position in some dark corner of one of her soon-to-be-foreclosed “investment properties,” wailing and raving incoherently.
Which cancelled Las Vegas condo project?
You mean the canceled Icon Towers project?
http://tinyurl.com/gczvk
Or Las Ramblas condotel and casino?
http://tinyurl.com/f2noy
Or these?
In Las Vegas alone, developers have canceled at least four other buildings in the last year, including one called Aqua Blue that was to contain a Michael Jordan health club. Dozens of other buildings, in which units have been sold, may never break ground, said Brian Gordon, a principal at Applied Analysis, a Las Vegas consulting firm. Mr. Gordon said there are 97 condo projects in the works in greater Las Vegas, representing more than 52,000 units.
“I don’t think anyone would expect that all these projects will move forward,” Mr. Gordon said. He predicted that fewer than half of them would be built in the next five years. Of course, if the market cools enough, some buyers may be happy to get their deposits back.
http://tinyurl.com/htntv
Yes, I’m sure they will.
Sorry for the double post.
“Broker Bruce Hiatt said he only sells condos that pay advance commissions early in the process; commissions are nonrecourse, meaning they don’t have to be paid back if the project fails.
WTF??? Exactly what is this dude selling….er misrepresenting
to the buying public? Couldn’t imagine what his sales pitch would be…
Hey suckers step right up, and plunk yer dough down for an overpriced condo in a potentially bankrupt development.
And who the h*ll is appraisin’ this stuff for the lenders????
You can bet it’s Skippie the Rubber Stamper-ain’t no wholesaler in his right mind gonna be buyin’ this junk if appraisal report’s up to snuff.
The collapse continues…
Hey, Bruce, who do you think the buyer is going to sue when the condo you sold him doesn’t get built? Sorry, Bruce, if you sell a condo in a building you know is going belly-up, you might come under the Statue of Frauds.
LV_Landlord - Come out come out whever you are!!
LOL.. you gotta admit it’s getting pretty bad for the “no bubble here” trolls these days. All those half-truths and wishful thinking has done no good as the news reports keep mounting up. Maybe they’re is past the denial stage and somewhere in the panic stage.
If you want to see bubble deniers go to OCR’s RE blog.
Unfortunately, it is edited so the flames will come at the bears and no bear flames get published.
http://blogs.ocregister.com/lansner/
There cannot be an honest debate about the housing market it is impossible.
The best hope is to segregate the bulls and the bears and let the undecided public read them separately and make up their own mind.
I am nearly done with OCR’s blog as I feel I have done my civic duty and warned some of the significant hazards in RE today, let the sheeple go to slaughter.
the wsj publishes everything and i have been extreamly rude to shorty bloke aka happy hal 9000
SunsetBeachGuy, good to see you here. You’ve got the right approach on the OCR blog, hang in there.
“Hiatt said he felt misled by developers who used his time and services to pump up the value of their land to flip it. Such situations caused agents to ‘lose face’ with their buyers, many of whom became disenchanted with Las Vegas after their negative experiences.”
My heart bleeds for their loss of face. Ah, so. We know what the Japanese do when they lose face…Is this guy up for a little Hara Kiri?
Took a drive today and went to look at the new “town” and Greg Norman golf course being built on the outskirts of Bakersfield. Near 1-5.
WTF is going on??
I am either STUPID (and will give back my college degree and cpa license if I am wrong) or this will be the BIGGEST BUST in the history of CA! This will be a town of 20,000 with a 36 hole golf course and commerical and retail. THERE IS NOTHING ELSE OUT THERE! I am truly baffled. These guys will either become very wealthy or go broke??
Here is a link:
McAllister Ranch Bakersfield, California
An 18-hole privately operated, public course. McAllister Ranch is a SunCal master planned community with over 6000 residents at completion. This is the first GNGCD course in California’s growing Central Valley. Construction began in November 2005 and is scheduled for completion in the summer of 2007.
See Also: http://www.mcallisterliving.com
“Children will enjoy the multiple proposed schools”
Cue Ghostly Voice:
If you propose them, they will come.
At least children’ll have someplace to live . . .
Juxtaposed to a nasty editorial in our local Rappahannock County, VA paper today, where population is less than during the Civil War:
“most burdensome of all, waves of children to be educated and the consequent rapid increase in the schools budgets, including construction of more schools . . . the two-cent tax is the price we are asked to pay for the kind of county we have now: uncrowded, open and beautiful.” (the two-cent tax is to pay the farmers to not sell their land).
It is appealing to the racially biased home buyer…escape Bakersfield and come live in our new caucasion dominant community (note the white girl with freckles and pigtails on their site’s front page).
Greg Normans website says 6,000 and 18 holes - our local paper said 36 holes and 20,000. Either way - I just don’t see it.
Dude ! I’ve passsed through stinky Bakersfeild, even their fast food places are so grimy and outdated you just want to keep on driving to the next town.
Nah, there is a nice In-Out Burger right off the 99 just before the turnoff to get to Isabella.
Hey Crispy how is the dam holding up?
Could be the Chandlers and Tejon Ranch are involved. Very deep pockets.
I think with everything posters have already mentioned, Bakersfield, the L(ost)as Vegas fiascos, the bubble, in general, we have really reached the end. When will the insanity stop. Just give a modest home for my two kids and wifey and me and a little land. I don’t need the Michael Jordan spa. I know some will disagree, but this is the real reason why the rest of the world hates us. Not to be too political. It isn’t that we go into Iraq, but that it appears we have all this luxury and do it. In WWII we had just come out of the depression and then the war hit. Know we come out of our McMansions and Michael Jordan spa and go to war. What the hell kind of message does that send everyone else. I know, I know, that isn’t the way it is for most of us in the USA, but that is the perception, I think, worldwide, based on the bloobtube. Sorry for the rant, but when I saw MJ spa, I couldn’t help it!
Gluttonous Americans aren’t a political issue, they are a demographic fact.
Obesity rates
Energy consumption rates
etc.
Energy consumption rates
Huh? What I see is 24% of the World Economic Share consuming 26% of the world’s annual energy. At that it misses a lot of other mitigating circumstances.
I knew I could count on you.
We agree to disagree on that one.
We don’t disagree. You are wrong amd I am right. This is easy. You can be right by acknowledging that the slightly less than 5% of world population in the US uses very approximately 24% of the world energy and again very roughly produces slightly more of the world total output.
Yeah, I always park my car on the street at my children’s school and walk up to get them when the bell rings. A little exercise and fresh air. When I get to the front of the school, every single day there is a row of FAT ass moms in the drive through lane, sitting in their SUV’s, with the air running. Totally makes me sick.
Unfortunately, the kids are increasingly FAT ass also.
Nothing’s changed
http://www.diggerhistory.info/pages-battles/ww2/battle-brisbane.htm
You are so right, Sunset. Thank you for getting to the point I was trying to make. It is just so frustrating. Love this country, but when I hear some leach of a broker whine about $200K lost, take a flying leap! What world are you living in! Why not go out and earn that money or actually save, or better yet, after getting it go donate half to the local homeless shelter. Man I hate gluttony. No wonder it is one of the 7 deadly sins. Look at the attitude it creates, let alone the behavior.
Not to sound overly doom and gloom, but my sense is that we’ll see another great(er) depression in the near future that will correct all this. I see it too - the SUVs, the waste, the “entitlement” mentality — it just can’t last. We just gotta do what we can to prepare and save.