Posted by: Chris Palmeri on September 06, 2009
I’ve written before about the sorry state of the condo/hotel market in Las Vegas. Bill Lerner of Union Gaming just came out with a report with some more analysis. He says sales have slowed to just a trickle—four per month. Prices in buildings such as the Trump International Hotel are down about 18% but that’s only because the developer still owns them and isn’t willing to take a huge hit.
Re-sale prices, in projects like MGM’s three Signature towers are down 70%. Local Realtor Rob Jenson tells me many of the units are priced well under $200,000. Some of these sold for $600,000 and up. Condos on the Strip in general are down about 50%.
All this is bad news for CityCenter, the $9 billion hotel and casino complex that is supposed to open in December. Lerner figures it will have to cut prices about 50% from what it is asking now. MGM has already sold about half of the 2,400 condo it plans to sell for the project. But acccording to the Las Vegas Sun, condo buyers—who have paid an average of $1 million per unit—are now asking for price reductions and threatening law suits.
They have even started a condo buyer blog to share info and commiserate with each other.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.