Archive for December, 2012

Rising to the Top of the US Seller’s Markets is Sin City Las Vegas

Friday, December 28th, 2012

Las Vegas was one of the cities hit hardest by the housing bust some years back.  But now its rebound has been so strong that it’s rising to be one of the top sellers’ markets in the country.  Local and foreign investors alike are eagerly taking advantage of cut-priced homes and turning them into affordable rentals.

The best performing states in the US at the moment include Washington State, Arizona, California, and Nevada – the very same regions that were also the hardest hit.

According to Stan Humphries, Zillow’s chief economist, investors are taking advantage of low prices and the reduced interest rates of distressed homes in these states.  Inventory levels there have reduced rapidly due to high sales, and this has helped to improve the prices of homes.

Zillow said that its rankings were based on different sets of data like sales prices against asking prices, percentage of homes in the market marked with price cuts, and number of days listed on the market.

Homes that are listed in the sellers’ markets for a shorter length of time have less chances of seeing their prices slashed, hence their sales prices become nearer or even greater than their previous listing price.  Zillow also conducted a survey of the top ten buyers markets.  These refer to those markets where homes lingered in the marketplace for the longest period of time, and consequently saw prices are cut more frequently.  The survey showed that Chicago was a top the list of the buyers’ markets succeeded by New York, Cincinnati, Philadelphia, and Cleveland.

For the coming year, 2013, Las Vegas is expected to see a small rise in foreclosures in the first quarter but not nearly as high as the levels of 2010-2011. Also, investors are expected to see as much as a12% return of investment in the early quarter.  Experts say that prices in Las Vegas will continue to rise in the following 6-12 months, although it is expected to remain a tempting one for investors throughout the year.

 

Reno and Las Vegas Strong Bets for Real Estate Investors

Thursday, December 27th, 2012

Investing in Reno and Las Vegas real estate properties is one way to ensure that money ends up in your pocket.  Prices are still very low in these two cites after they experienced a deep plunge during the economic bust, but evidence suggests that a strong rebound is currently in progress.   Multiple Listing Services (or MLS) data shows the following evidence of strong growth:

Prices are up

In Las Vegas there was a noticeable 12.4% increase in home prices during October, compared to the previous year.   Reno, on the other hand, showed an increase of 11. 7% compared to the same month of the previous year.  Both cities showed indications that they were improving much faster than other markets in the nation.  Single family homes in Las Vegas went up by 11.9% in October compared to September’s sales.  Townhomes and condominium units rose by 5.7%.

Tightening of inventories

Both markets are seeing significantly reduced inventories.  Reno’s inventory decreased by almost 30%, while in Las Vegas, inventory went down by 24.4% over the last 12 months.

Declining Foreclosure rates

Tough new foreclosure rules that are now being implemented in Nevada helped to reduce both city’s foreclosure rates.  Before the new foreclosure rules, foreclosure rates were at one for every 39 homes, one of the steepest in the country.  Now however, the foreclosure rate has much improved and currently stands one for every 139 houses.

Lowering of Unemployment

Unemployment rates are still a problem for both cities, but as the economy improves in these areas more jobs will almost certainly be created.  And while both the economy and job growth are still a bit on the shaky side, several factors predict that these two cities are set for a stable rebound, meaning it would be a smart decision to make your move in the real estate market now.

 

Las Vegas Home Asking Prices Up

Wednesday, December 26th, 2012

Listed home prices in Las Vegas rose 13.7 percent last November from a year earlier, according to the online property listing service Trulia.com, which also noted that rents in the same comparative period inched downwards by 0.7 percent.

Signs of a rebound, meanwhile, were also observed in cities of inland California and Atlanta which were erstwhile lagging in the home market recovery, the chief economist of Trulia, Jed Kolko, said. He noted that in the metro area of Riverside-San Bernardino, California, a 5.5 percent price gain was achieved on a quarter-over-quarter basis.

Using the same time frame, a 5.3 percent increase was recorded for Sacramento, the economist said, adding that the increases in these two California metro areas were among the top 10 highest nationally. Their recent performance represents a significant turnaround from what they achieved early this year. Hit hard by the housing market’s meltdown, these metropolitan areas had been slow to recover than other hard-hit cities, like Las Vegas, Phoenix, and Miami which have already benefited from the recent price rebounds.

The asking price for homes in the largest 100 U.S. metropolitan areas gained by 0.8 percent in November, and by 2.2 percent in a quarter-over-quarter comparison. These increases were the biggest on a quarterly and yearly basis since the start of the housing crisis, Kolko said. He likewise noted that the November monthly gain was only slightly lower than the October increase which is likely to be the highest for this year.

In contrast to the steady increases in the biggest among these 100 metro areas, prices are wavering in many other cities, Kolko observed. He also noted a 5.6 percent increase of rents from a year earlier. Nevertheless, gains in home prices are accelerating faster than rents in the majority of the largest rental markets. Kolko believes that the recent trend toward home affordability is losing its steam in the big cities.

A forward-looking index, the Trulia asking price monitor cannot yet be compared with other similar indicators. It won’t be until January 2013 that November figures from other sales price indexes, such as CoreLogic and Case-Schiller, will be released. One of the latest sales reports that have come in is from the Las Vegas-based SalesTraq which showed an average October closing price of $124,000 for existing homes, an 18.1 percent increase from a year earlier. Gains in average home prices have been recorded for nine consecutive months, for a 24 percent increase from the $100,000 median price this January.

 

 

Las Vegas Museum Honors African American Architect

Monday, December 24th, 2012

The newly opened Neon Museum in Las Vegas more than preserves the vintage neon lighting that has helped form the iconic image of the city as the entertainment and lifestyle capital of America. The museum also incorporates the restored lobby of La Concha, in homage to this motel’s designer, Paul Revere Williams.

This respected African American architect is well known not only for his designs of movie stars’ homes in Southern California. His claim to fame also goes beyond designing high-end hotels as the designs of several landmarks around Las Vegas and Reno also came from Williams’ drawing boards.

Distinctive A-Frame Cathedral

Besides the 100-room La Concha Motel, Williams is also believed to be the designer of the Guardian Angels Church, which draws attention to Las Vegas Boulevard with its distinctive A-frame. Some of his lesser known works are the Las Vegas residences for the local African American community, which were built during the 1950s. Essentially, these are modest, ranch-style single family homes which Williams designed out of his strong sense of helping his fellow African Americans, according to an architect-historian, Allan Hess.

There are two neighborhoods in the valley which are thought to bear the handiwork of Williams. Actually, there may be three. Carver Park, a former neighborhood around Henderson downtown, was also said to be developed with Williams as the architect. Unfortunately, the Carver Park community no longer exists.

First African American Community in Las Vegas

One that remains and has become prominent is Berkeley Square in West Las Vegas which was listed in the National Register of Historic Places in 2009. It is regarded as the first neighborhood in Las Vegas to be built for its African American community.

Named after an African American lawyer and newspaper publisher, Berkeley Square was populated by some well-to-do residents with two houses, with one kept exclusively for guests and for out-of-town entertainers.   To this day, Berkeley Square remains an important Las Vegas community. It has a high occupancy rate, and many of its residences are still occupied by the children of the original residents. It is rich with pride and history being the first Las Vegas African American community.

Williams’ craft is likewise thought to be behind the inexpensive homes in Basic Townsite, a small neighborhood surrounding downtown Henderson. The architectural style in this neighborhood appears similar to that of the homes in Berkley Square. Basic Townsite was also primarily developed for African Americans.

Revenues from Strip Resorts Expected to Increase by 2013

Friday, December 14th, 2012

According to some analysts, strip resorts are more likely to have a 5.3% increase or 8% decrease in revenue by next year, depending on the performance of the US economy.

Las Vegas-based Newmark Grubb Knight Frank’s Global Gaming Group, a real estate brokerage, issued its 2013 investment guide forecasting growth on Strip revenues, assuming that the country dodges another recession.

Growth forecast in Strip revenue is expected to increase about 1.5% to 5.3%. According to NGKF, a 2.5% increase in Strip revenue was observed through June. State Gaming Control Board stated that Strip gaming win has improved by 4%.

This year, operators of Strip hotel-casino have seen benefits from increased visits to the city. The visitation rate to Las Vegas was up by 1.8% through September.

By 2014, SLS Las Vegas will be adding about 1,217 hotel rooms. By next year, 650 additional rooms are planned for the opening of the Downtown Grand.

A few resorts are not seeing the growth trend though. The Stratosphere’s room rate decreased to $48.99 from the previous $50.31.

Consumer health is one factor that affects spending and visitation as measured using the household net worth. This indicator, together with the stock market and housing prices foretells growth by 2013 as indicated by a NGKF report.

The Chinese economy and its effect on high-end baccarat players is another factor to watch as well. The baccarat revenue is expected to decline or increase by 5% as projected by NGKF. However this depends on how the stock markets and the Chinese real estate perform.

According to NGKF, demand for hotel room booking with meetings and conventions is expected to grow by 1% to 4% next year with room prices increasing from 3% to 7%.

By 2013, Las Vegas will host a number of large events however economic events are more likely to cause businesses to put a hold on the group bookings, according to several analysts.

Fred Segal Stores Set at SLS Las Vegas

Thursday, December 13th, 2012

The upscale Fred Segal apparel retailer will have seven stores at SLS Las Vegas when this hotel opens in 2014. A deal to this effect was signed recently by sbe, the company behind the hotel development, and SANDOW, franchise holder of the Fred Segal retail chain. The stores will occupy 10,000 square feet in the hotel, representing all of its retail space. This marks the first time that a single brand will hold exclusive domain to the retail space of a hotel.

Sam Nazarian, sbe founder, chairman and CEO, expressed elation over what he called a partnership between two powerful brands. He noted that the distinctive style and culture from Los Angeles that Fred Segal brings further strengthens SLS Las Vegas hotel’s upscale market positioning. Similarly, Adam I. Sandow, chairman and CEO of SANDOW, is delighted with creating a unique retail experience at the SLS, noting Las Vegas’ reputation as a haven for the luxury retail market.

A wide range of stylish Fred Segal merchandise spanning various categories will be available at the sbe property. Among the merchandise that the stores will carry are men’s and women’s apparel, swimsuits, jewelry, and other Fred Segal-branded accessories and items. These retail outlets will also feature a highly-curated denim bar, beauty products, books, and art works.

The SLS Las Vegas hotel’s design is from the drawing boards of the iconic designer Philippe Starck. This project is Starck’s first in Las Vegas and his biggest undertaking so far. Upon completion, the property development will be operated as a mixed-use hotel and casino. The hotel will have over 1,600 guest rooms and restaurants. It will also be host to the acclaimed sbe brand portfolio of restaurants and nightlife venues. A world-renowned planning, design and strategic consulting firm Gensler, will handle the Fred Segal boutiques’ integration into the SLS Las Vegas Hotel development. Prior to the 2014 inauguration of SLS Las Vegas, sbe is expected to open a redeveloped SLS Hotel New York on Park Avenue and 33rd Street.

Las Vegas Property Market on the Upturn Finally

Wednesday, December 12th, 2012

The tide appears to have turned in favor of the Las Vegas property market which saw prices dropping by as much as 70 percent with the US housing meltdown of 2008. Recent statistics show that home prices are on an uptrend and new lows were registered in foreclosures in the city.

Based on figures from the Association of Realtors, the median price of condominiums sold this September rose 19.8 percent, while a 13.7 percent gain was recorded for single family homes. Significantly, sales-listed single family homes and condo units which didn’t receive buy offers for the month dropped by 63.1 percent and 35.6 percent, respectively. This decline manifests the U.S.-wide trend of lower home inventory, rising demand, and upward push on prices.

This September, foreclosure filings nationwide nosedived to a five-year low, resulting in fewer properties bound for lenders’ seizure. For the state of Nevada, a report by RealtyTrac showed that foreclosures declined by 71 percent which translates into one foreclosure filing for every 158 mortgaged homes.

Significantly, international buyers are adding to the local housing demand. An increasing number of visitors from China, Hong Kong, and Taiwan, have been noted recently, and such arrivals are expected to continue for quite some time. According to a projection by the U.S. Department of Commerce, there will be a 219 percent increase in Chinese visitors in Las Vegas by 2015. With the growing influx of foreign arrivals, Terminal 3 at McCarran Airport has been expanded.

Mandarin Oriental Las Vegas is one of the direct beneficiaries of this uptick in international visitors. Its lofty reputation, competitive pricing, and attractive rental income opportunities make the Mandarin popular among foreign buyers. Discounts of as much as a 50 percent are said to be available, making the Mandarin a competitive choice. With net rental yields at 7 percent on the average, acquisition of a unit here is indeed worth a look from foreign buyers.

Ravella, Casino MonteLago Sold for $46.8 Million

Tuesday, December 11th, 2012

Kam Sang Co., a California real estate firm based in Arcadia, has acquired the hotel Ravella at Lake Las Vegas and its adjoining Casino MonteLago for $46.8 million.

The casino building and the 349-room Ravella at Lake Las Vegas were purchased from Village Hospitality LLC, an extension of Deutsche Bank. The bank unit acquired the property in 2009 after the original owners filed for bankruptcy protection. Then known as the Ritz-Carlton, the hotel defaulted on a $103-million mortgage, leading to Deutsche Bank’s foreclosure on the property. The hotel was reopened in 2011 under its new Ravella name.

Kam Sang has expressed interest in the property as early as 2009, but the initial overture was rejected. This February, the company revived its purchase proposal to Village Hospitality, reportedly at a price lower than the original offer. A Kam Sang executive said their purchase timing now was great with Ravella having a nonbank owner. He added that their company has been eying acquisitions on the quality and scale such as this purchase. They intend to keep the Ravella for the long-term and consider other Las Vegas hotel opportunities, he said.

The Ravella purchase was the first acquisition of Kam Sang, a thirty-three-year-old development firm, outside of Southern California. In this area, the company owns not only hotels but also residential assets, retail shops, and restaurants as well as other mixed-use properties. The hotels in its investment portfolio include the Sheraton Hotel in Anaheim, Embassy Suites in Glendale, Courtyard Marriott in Baldwin Park, Rancho Cielo Estates in Rancho Sante Fe and Residence Inn by Marriott in La Mirada. Among its retail properties are Puente Hills East at the City of Industry, Simi Valley Town Center at Simi Valley, and Kaleidoscope at Mission Viejo. The majority owner of Kam Sang is real estate developer Ronnie Lam who likewise owns Tokyo Wako, a Southern California chain of sushi restaurants.

Economic Growth Forecasted on Strip Resorts for 2013

Friday, December 7th, 2012

On Thursday, a group of analysts said that hotels along the Strip can expect an increase in revenue as much as 5.3%. The increase in revenue is expected to come from multiple sources as the economy continues to recover. Newmark Grubb Knight Frank’s Global Gaming Group, a commercial real estate brokerage based in Las Vegas, published their predictions for 2013. The group predicted that the entire Strip revenue will have a growth of 1.5%-5.3% that is if the trend continues and the country doesn’t slip into recession once again.

The Newark Grubb Knight Frank’s Global Gaming Group said that the Strip revenue rose up to 2.5% through June. And improved to 4% in September, which is equal to a $6.2 billion increase. Operators of Strip hotel-casinos have experienced a gain in visitation rate of 1.8% during the month of September. In 2014, there’s a planned extension for additional 1,217 rooms. The project is in partnership with the SLS Las Vegas that will be located at the former Sahara site. Also additional units are also planned for the Downtown Grand that will open next year. The biggest component that’s moving the visitation rate upward is the local consumers.

But not all the resorts are gaining profit from the trend. The Stratosphere, a budget-friendly hotel casino has declined in its average room rate from $50.31 to $48.99 but on the other side of the coin the high-end Cosmopolitan hotel resort increased the rates of their rooms from $233 to $257.

One other factor that could affect the trend is China’s economy. The Chinese community comprises a large cut of high-end baccarat players. The baccarat revenue could still grow or fall by 5%, this will depend on the Chinese real estate and stock market performance. So definitely, their country’s economy is something to keep an eye on. Se Oei, director of gaming research and analysis for Newark Grubb Knight Frank’s Global Gaming Group said that the Eurozone situation and the fiscal cliff could still affect the overall trend. He stressed that although there are some concerns the group is still optimistic.

Las Vegas Home Prices Rising

Thursday, December 6th, 2012

Increases in housing prices by as much as 30 percent are being posted in some submarkets of Las Vegas, but an analyst of Home Builders Research, Dennis Smith, doubts that this pace can be sustained. The research firm reported that 593 new home were sold this October at an average price of $216,614, which is 10.3 percent higher than $196,360 of a year ago.

The current price levels for new homes manifest the effect of a thinning home inventory, Smith observed. Upward adjustments of up to 30 percent were seen at some real estate sales offices in Mountain’s Edge, Summerlin, and Anthem.

Smith noted that each month, it is becoming more evident that a market correction will emerge. This, he maintained, is an eventuality that will occur despite the government initiatives to have banks and mortgage servicers help stimulate home market recovery.

The analyst monitored 4,098 resale closings this October, which brings to 41,596 the year-to-date total for a 4 percent gain from a year ago. The average resale price increased by 18.2 percent from the year-earlier level to $130,000. While the statistics do look positive, the much-segmented increases bring some concern for Smith. In the Las Vegas Valley, he noted that there are still communities under downward pricing pressure emanating from distressed residential properties. What Smith is worried about is that an unknown number of homes maybe released as “instant inventory” should banks pursue foreclosure proceedings on these properties.

The analyst cited a recent CoreLogic report showing that 63 percent of Las Vegas home mortgages are underwater, meaning that their owners now owe more than what their home is worth. The percentage of these underwater homeowners is actually lower than the 68 percent level of a year ago. But still, Smith maintained that the current percentage level is three times that of the national average. He estimated that there will be over 100,000 potential defaults if half of the 225,000 underwater homeowners hang on to their properties. In turn, half of the foreclosed housing could end up going back to the bank and eventually the market, he said.

In the meantime, the low inventory of homes for sale continues to steer the Las Vegas housing market. Competition among buyers has intensified and multiple offers go to the best-priced homes available. Cash buyers account for 48 percent of home sales, further manifesting the dynamics that dictate the current pace of the market.