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Real Estate Investments in Las Vegas
Real estate investors flocked to Las Vegas during the first six months of 2004 and drove prices up an unprecedented 35% in some parts of the Valley. Much of this money was being shifted out of the California market where real estate investments had hit a ceiling due to the high prices. Savvy California investors were liquidating their properties in order to take advantage of the better cash returns Las Vegas could offer. Most new home builders quickly placed a moratorium on investor purchases to prevent future competition from buyers who "flipped" their new home purchases and cashed in on quick profits.
A scarcity of vacant land for developers to build on and a continuing influx of over 6,000 new residents a month quickly turned the Las Vegas real estate market into a battlefield for buyers who ended up in multiple offer situations as they competed for a dwindling supply of homes. More homes sold for over list price in just a few months this past spring than in the previous five years combined.
In late July and August, however, the dramatic upward surge rapidly ceased as new homes (purchased by investors who were under contract before the moratorium was implemented) finished construction and went back on the market. In addition, local residents who had already toyed with the idea of moving out of state decided to cash in on the bonanza profits as well. Through the end of October the supply of homes increased steadily, sales settled back to a normal pace and prices even decreased slightly as the market stabilized.
But the big real estate investors are already zeroing in on the newest "hot buy" in Las Vegas - high rise condos and condotels. Downtown Las Vegas is going vertical and major developers from all over the world have over 80 new preconstruction condo projects on the books. Many sites have sold out and have not yet broken ground.
Springtime also promises to be interesting on the Las Vegas new homes front again. The vacant land crunch is still in effect for the new home builders and the supply of new homes is once more diminishing as the investor owned properties are finally selling off. Plus the baby boomers are coming into their own, and Las Vegas is their number one retirement destination. So look for another burst of excitement in a few months as the dynamic Las Vegas real estate market takes another leap in pricing!
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