Like any good Vegas adventure, the real estate boom in the desert had a cast of colorful characters, more bluster than action, and, for some, a rough morning after. Starting in 2003, legions of developers swooped into Sin City, heralding plans for more than 100 luxury condo projects totaling some 70,000 units. But as the cold reality of land and construction costs set in, most packed up and left town.
"It was typical Vegas - a lot of hype," says local real estate consultant John Restrepo, who estimates that only 10 percent of the projects actually got off the ground. So while the lower end of the Las Vegas condo market swoons - the total number of units for sale is up 63 percent since last year - the market for luxury condos is strong. And it's likely to stay that way.
The majority of the towers are in the so-called resort corridor, the Strip and its environs, popular with foreign buyers benefiting from a weak dollar. "To those buyers, a million-dollar condo is very reasonable," says Bruce Hiatt, co-owner of Luxury Realty Group. Foreign buyers have already snapped up 30 percent of the units in a new Mandarin Oriental residence scheduled for fall 2009. The rest of the building, part of a $7 billion MGM Mirage project, is almost sold out: 90 percent of its 227 units, which start at $1.5 million, sold within two weeks of release.
Where does that leave potential buyers? Analysts say prices aren't likely to drop from here. But in a few years there will be more inventory as well as ample opportunity in resales, when the earliest investors who locked in the best prices start to sell. "In two or three years your choices are going to be phenomenal," says Sean Brown, CEO of the Vegas-based National Association of Residential Real Estate Investment Advisors. Sometimes in Vegas it pays to hold.