Archive for February 10th, 2010

Another Blow to Lake Las Vegas

Wednesday, February 10th, 2010

Lake Las Vegas can best be described as a “speculative” investment that continues to get riskier all the time. A never ending bankruptcy reorganization for the developer, combined with a potential class-action lawsuit against Credit Suisse AG (over alleged predatory lending) is now topped by the headline grabbing news that Ritz-Carlton Lake Las Vegas is closing completely May 2nd. Over the past 18 months our Las Vegas real estate team has been bombarded with inquiries about the purchase of vacation property in this once alluring luxury oasis. It’s been very tempting for many prospective buyers to discover properties in such a beautiful luxury community selling for as little as 30 cents on the dollar compared to peak prices. The questions are constantly asked; what will end up happening to the community? Are these good values at these incredibly cheap prices? What are my chances of substantial upside if the community recovers? Will the community bounce back or not?

We have constantly advised extreme caution and reminded people that if Lake Las Vegas property is selling for as little as 30 cents on the dollar compared to the market peak, it’s certainly not for no reason. As a corollary to this, we also remind people that if something seems too good to be true, there may well be a good reason for it. The Michelle Sterling Team has no idea what will happen to the Lake Las Vegas community over the course of this drastic economic downturn and couldn’t even guess as to whether it will eventually recover and prosper. One thing is for sure, the odds of recovery look slimmer every day. The loss of the Ritz is a huge blow and we wish to express our sincere condolences to the 350+ employees that will be losing jobs that must have seemed fantastic when they first landed them.