I find it interesting that speakers at Las Vegas real estate meetings are now attempting to project the timetable to build the next condominium high rise in Las Vegas. The latest projection was presented last week at 10 years by a prominent businessman who was involved in the development of Panorama Towers.
The curious part of such presentations is on what basis are these projections made? Is it labor cost or raw materials? Is it land costs? Is it supply and demand? Is it the current credit crunch? Sure these play a part in any developer's decision to build or not but how can one predict it will be EXACTLY 10 years when the next luxury high rise gets built? Careful running out and telling your clients this information without doing your own homework first.
I spoke with a very prominent Canadian client of Luxury Realty Group yesterday and I couldn't get him to stop laughing on this 10 year projection. Why was he laughing? It seems in Toronto, a developer is currently building a luxury high rise building that is very unique and prices begin at CDN$3 million. This developer researched the market and demand and concluded that his high rise condo project would attract the upper end of the market globally and demand would be strong. Turns out he is right so far.
So the lesson learned in all of this is while we have strong economic barriers to entry in Las Vegas for building new luxury high rise condominiums like Turnberry Towers or Sky Las Vegas, if the market will support a specific high rise project then it can get built and demand may very well be there.
The good news for Las Vegas is supply in the prime Resort Strip Corridor is already very limited for luxury high rise condos unlike Miami. So if another high-end luxury condo high rise project gets built in 3 years or 5 years, the market is ideally in a position to handle it if it is unique and demand is there.
So be careful what you assume when you see projections in any real estate market. Know the numbers and assumptions behind those projections before you declare them to your clients as fact.
Contact Bruce Hiatt at (702) 456-7080 x201 and let's create a referral opportunity for your buyer and Luxury Realty Group. You can also follow Bruce on Twitter @LuxuryRealtyGrp or subscribe to our RSS feed at www.LasvegasHighRiseBlog.com or www.FineVegasHomesBlog.com.
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