NewsMine — economy — united-states — 2006-jan-aug — Viewing Item

Lasvegas real estate market drying up Original Source Link: (May no longer be active)    http://www.time.com/time/business/article/0,8599,1152983,00.html http://www.time.com/time/business/article/0,8599,1152983,00.html Web Exclusive| Business & Technology Vegas Condos Go Cold Developers are suddenly scaling back their bets on the town's once sizzling luxury real estate market By SONJA STEPTOE/LOS ANGELES Posted Wednesday, Jan. 25, 2006 Now that several high rollers in the Las Vegas condo-hotel game, with properties linked to the likes of Michael Jordan and Ivana Trump, are either folding or selling their holdings, a growing number of players are losing their taste for big bets on high-rise residential real estate development. Over the past two years, as high-rise fever spread across town, prices for the luxury apartments ballooned, fetching as much as $500 to $1,000 a square foot—or up to $1.5 million for a one-bedroom— at the peak. Buyers, mostly interested in flipping them for quick profits, eagerly anted up five-figure down payments, while developers planned more than 70 luxury towers holding a total of about 43,000 units on or near the Strip and downtown. But the intense competition for the city's limited supply of contractors sent construction costs skyrocketing 30% last year, just as lending policies tightened, interest rates climbed and sales started to slow. Currently, just 18 projects are under way, and nervous developers have called off three high-profile projects over the past seven months. A number of others, including one backed by a group including George Clooney, are being either revised or postponed. Experts now forecast that only a quarter to half of the seven dozen originally proposed projects will ever be built. Brian Gordon, a principal at Applied Analysis, a real estate research firm, says the developers with experience building luxury high-rises, whose properties are located on or near the Strip and carry a strong and recognizable brand name— such as Donald Trump, Hard Rock and MGM Grand— are the ones playing winning hands in Vegas now. Back east, the luxury condo markets that have had similarly explosive growth in Miami and New York, where high-end apartments can command from $2,000 to $4,000 a square foot, haven’t slumped yet. Still, experts say the abrupt reversal of fortune in the desert, where the mainstream residential real estate and hotel markets are still quite healthy, shows just how quickly the odds can change in even the most affluent markets if runaway speculation and overzealous development take hold. “It’s another case of irrational exuberance,” says John Restrepo, head of a Las Vegas real estate and economic consulting firm. “There is a market for high-rise condo hotels here; but it’s not as deep as people thought it was. The days of the two guys from the East Coast or Canada coming into town and promoting a condo development with a website and a dream are over."

American wages falling behind inflation { August 28 2006 } Danger time for america says economist Danger time in america [jpg] Dollar continues to sink as dow tumbles { April 2006 } Dollar makes big gains early june Dollar may rally on higher interest rates { February 2006 } Dow index breaks 11 000 barrier { January 10 2006 } Economy slows sharply inflation heats up First halt in fed rate increase after 2 years { July 2006 } Ford closing plants in minnesota and virginia { April 13 2006 } Ford to cut thousands jobs 14 factories { January 23 2006 } Global stocks retreat on US interest rate fears Gold and stocks decline { April 2006 } Gold continues to drop early june as dollar gains Good job news knocks down stocks { January 2006 } Greenspan raises rates last time ever { December 2006 } Housing slowdown ripples through economy Lasvegas real estate market drying up Market uproar follows fed rate misunderstanding { May 2 2006 } Minimum wage not raised in 9 years blocked { June 22 2006 } Stocks and gold up { May 9 2006 } Stocks continue to slide early june { June 8 2006 } Stocks dive on faltering economy { January 21 2006 } Stocks fall and gold plummets mid june Stocks mixed after inflation worries persist { April 2006 } Stocks oil gold all rise { May 2 2006 } Stocks rally to 4 year high after 2006 new years Stocks sag as prices jump for gold oil { April 18 2006 } Stocks sink as oil and gold fan inflation fears { April 2006 } Stocks suffer biggest fall in 3 years { December 2006 } Trade deficits widened to record 2005 Unemployment rate proves inaccurate { December 2006 } Files Listed: 32

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