Las Vegas has been in and out of the news countless times since the GFC (yes, the global financial crisis has its own initialism now) in 2008. At its worst, the Las Vegas property market fell off in prices and values as much as 70 percent according to some estimates and it has yet to fully recover. But it’s not all bleak and dreary. Recent low prices have made room for first-time buyers to enter the market and have made luxury property a steal for savvy buyers.
Regardless of how miserable things may seem from some points of view, Las Vegas is expected to bounce back all the way eventually. It can’t not: Sin City remains one of the most popular tourist destinations in the United States, and despite Macau’s newfound gaming supremacy, Vegas is still the adult entertainment capital of the world. Its fundamentals and Nevada’s low tax policies are favourable to investors — and it has bounced back from near disaster before. Remember the “family destination” experiment? Neither do we.
Slow and Steady
According to research by American mortgage lender Freddie Mac, Las Vegas ranked dead last in a study of major US markets early this year. As reported by the Las Vegas Review-Journal in March, Las Vegas is the slowest recovering market in the country and it leads the way in foreclosures. Nonetheless, prices jumped nearly 25 percent in both 2012 and 2013, and Colliers International indicated that the last quarter of 2013 saw multi-family vacancy rates fall to 5.3 percent. “All submarkets except the Northeast showed positive net absorption in the fourth quarter of 2013, with the highest net absorption found in University and Henderson/Green Valley,” said Colliers’ fourth quarter report. Part of that had to do with the school year beginning (the University of Nevada at Las Vegas has nearly 33,000 students and faculty), but the city still stood in a better position than it did the year before.
The US property market is mired in a glacially slow recovery, which skews the numbers in Las Vegas, and Freddie Mac’s research is indeed backward looking. The problem with the slow growth in Vegas is how it influences new construction. With an oversupply of stock overall, new home starts slow and existing property values drop. However, there is a silver lining. Lower values and prices have made room for first-time buyers and residents previously priced out of the market to get into it. That’s little consolation to those who’ve lost homes because of shoddy or outright fraudulent mortgage practices (and there have been accusations of predatory lenders perpetuating the problem with those new buyers), but for cautious buyers with reputable advisors the time could be right before prices creep up more.
Of course, the luxury sector has always been separate from the mass market, and while many investor-owners of high end properties are willing to wait out the bust, more than a few are re-entering the market to test the waters and reduce the chance of greater losses if things don’t get better. That means price negotiation is a lot easier. “The higher-end homes have lagged in appreciation and people feel the timing may now be right to sell,” Dale Thornburgh of Synergy Sotheby’s International Realty told the Wall Street Journal in March.
Whatever troubles Las Vegas has experienced, it hasn’t stopped the Residences at Trump International Hotel Las Vegas from a renewed sales push. The last of the 64-storey tower’s inventory has become available, and based on earlier patterns the remaining suites should fare well on the sales front. Looming over the Las Vegas Strip — something Macau cannot duplicate — the 1,232 units in the luxury Residences feature full kitchens (kitchenettes in the studio units) equipped with Sub-Zero, Bosch, and Wolf appliances, classic contemporary interiors, floor-to-ceiling windows with views of Las Vegas, signature sleep systems, elegant master bathrooms boasting Italian marble, glass-enclosed dual-head showers, whirlpool tubs and in-mirror plasma televisions. All the glitz is on display in the hotel’s new showflat, which came about because, “Strong demand from international and repeat buyers has precipitated the move to a … new sales centre, located on the top floor of Trump International Las Vegas,” Eric Trump, executive vice president of development and acquisitions for Trump Organization, explained in a statement.
Trump Las Vegas is a non-gaming hotel, and as such offers buyers and guests a more sophisticated atmosphere. Its address at 2000 Fashion Show Drive — just a few minutes from Wynn Encore, the Wynn Golf Club, Fashion Show, the Mirage, the Venetian, the Las Vegas Convention Center and hundreds of attractions, restaurants, retailers and entertainment venues — is ideal. The hotel’s services and amenities include a spa, pool with café, full-service business centre, kids’ facilities and programmes and a dedicated owners’ representative. And yes, the tower is gold.
Prices at the Residences at Trump International Hotel Las Vegas range between US$250,000 and $3.75 million (HK$2 to $29 million), for suites sized from 526-square foot studios to 3,080-square foot three-bedroom apartments. Entering the hotel’s rental pool is optional.