However, there are sure to be some bumps along the way. For example, a study commissioned by Deutsche Bank says it doesn’t expect all the condo developments to go forward. Interestingly, it estimates only about 40% will be completed. One proposed development, Krystal Sands, has already bitten the dust and has had to refund hundreds of deposits. But that still leaves at least 13,000 new units within the next five years. And there is little doubt that the condo building boom has a tremendous upside. Again, according to Peterson, “as long as real estate prices are higher in other areas of the country, we’re going to be a bargain. So a starting price of between $275,000 and $300,000 looks like a great deal…and is!”
There is also the fact that the weak dollar is attracting a lot of foreign investment in U.S. real estate, especially Las Vegas. Only a small percentage of people are expected to call their Las Vegas condos their primary residence, so it makes perfect sense for investors to buy a second home in such a glitzy entertainment and gambling resort city. And there is the fact that Nevada has no state income tax, and very relaxed taxes overall. So, wealthy Americans, along with well heeled foreigners, are looking to park their investment dollars in what many consider to be a safe place.
Selling Like Hot Cakes
And how are the condo developments doing so far? To categorize sales as brisk would be an understatement. One project sold out all 248 units in 48 hours. One reason is that there is no prohibition against absent owners buying property as eventually was the case with the housing projects. Subdivisions were becoming nothing but rows of homes purchased by out-of-state owners who had no intention of living there. They just wanted to rent out the homes and watch the values go up. The fear was it would result in a “transient” all-rental neighborhood, thereby lowering property values so the builders began to severely limit who could buy. That isn’t the case with the condos. As stated before, it is quite the reverse.