Unfortunately, no one foresaw the coming credit crisis. In the past years, money was freely flowing with extremely low interest rates and rampant mortgage fraud. The Federal Reserve and other federal banks around the world were attempting to overcome the stock market crash of 2000-2001 and the 9/11 tragedy by effectively giving money away at very low rates. That has come home to bite them in a big way. Dozens of major mortgage companies are now out of business. Banks and brokerages around the world have written off approximately $200 billion and it is estimated when it's all over some $500 billion - $1 trillion will be written off. It is estimated that $2 trillion will be withdrawn from the lending environment. That is serious money. Not only has the sub-prime mortgage market blown up, but the credit crisis is now spreading to the Alt-A and prime mortgage markets. Money is drying up, especially for jumbo loans as these loans can't be sold to Fannie Mae or Freddie Mac.
The Las Vegas high rise market is a jumbo loan oriented market, since many units sell for well over the $417,000 jumbo cutoff amount. So unless you have stellar credit and are willing to put up a hefty down payment, jumbo loans will be hard to come by. The credit crisis is not only upon us here in the United States but is spreading throughout the Western world.
Why? It's because banks and brokerages around the world bought our sub-prime paper sold to them by the snakes of Wall Street, who wanted to get the bad paper they created off their balance sheets and spread the risk. How unfortunate for all of us as this has created a dollar crisis by essentially printing money at an alarming rate and in turn creating an energy crisis since oil is priced in dollars. The more dollars created and/or printed, the higher the oil price goes as oil producers are paid in cheaper and more worthless dollars. Why bring up a dollar and energy crisis when talking about the Las Vegas High Rise real estate market? Because it is all related as to the price one should pay for a luxury high rise condo or loft in Las Vegas.
The LasVegasCondoBargains.com TM site each day tracks listings, price reductions, and sales of high rise condos where the seller is selling his unit for well under what he paid for it. Essentially, we track bargains for the high rise condo predators out there looking for the ultimate buy.
For those sellers still holding on and pricing their high rise condo units well above the price they paid for them, we fear they are in a state of deep denial. Especially those sellers who just closed on their units this year. What these sellers refuse to understand is that there is no way an appraiser will appraise a unit someone just recently closed on for the $50-$200k higher price the seller is seeking. The banks have been burned to the tune of hundreds of billions of dollars. The banks will NO WAY accept that higher appraisal. So for example, if you just closed on a high rise condo unit for $700K and are asking a selling price for $800-$850K, you WILL NOT GET THAT APPRAISAL FROM ANY BANK. So, as a seller you will have to find an all-cash buyer to take you out by bypassing the banking loan process. Essentially, as a seller, in today's credit crunch real estate market, your unit is only worth what you paid for it. And in many cases it is worth less. You can essentially wipe out 2006-2007 real estate prices, because we're back to 2004-2005 real estate prices.
For those buyers seeking out preconstruction deals, our opinion is that they don't exist for Las Vegas hotel-condo projects at this point in time. Sure, construction costs are soaring in Las Vegas and as a potential preconstruction buyer, you will be paying for those soaring costs. But ask the hotel-condo project owner what the future rental program split is.
When you buy a hotel-condo, you are essentially buying an income property. Many folks are buying this kind of property to be placed into the hotel rental pool where you share in the profits. Most hotel-condo splits are 50/50, but when you take in all the hidden costs and other restrictions, you are really winding up with about 35%-45% of the split. And that's before paying for mortgage costs and taxes.
Our advice is to Buy from those who took the plunge and bought the preconstruction unit, took possession of that unit, and have now priced that unit for TENS OF THOUSANDS OF DOLLARS below what they paid for that unit.
Lastly, it is estimated that over the next 6-7 years, the supply of hotel rooms on the Las Vegas Strip will increase by approximately 35,000 units. New magnificent units are being built at Wynn Resorts, The Palazzo Hotel (next to the Venetian Hotel), Trump Las Vegas, The Cosmopolitan Resort, MGM CityCenter, The Plaza Project (on the old Frontier Hotel site), Echelon Place (on the old Stardust site), The Fontainebleu Hotel (near Turnberry Place), The Crown Hotel (on the old Wet & Wild site), MGM City Center North, etc.
We recommend the purchase of residential high rise condo units in SKY, Panorama Towers, Turnberry Place, Turnberry Towers & Allure ONLY at bargain prices. The only hotel-condos that we recommend for purchase today are those at the Signature at MGM Grand hotel-condos that are now selling, in many cases for as much as $200k under original cost!
So be careful out there. BUY BARGAINS. BE THE CONDO PREDATOR. Ask The Stark Team about the deals in the Las Vegas High Rise market. We are the pioneers for high rise investors and condo buyers. WE ARE THE DEAL MAKERS.
If you are a large investor or hedge fund manager seeking BULK CONDO deals, contact us. We know all the developers on a first name basis. If you are seeking a luxury home, loft, luxury condo on or near the Las Vegas Strip or downtown, we can make your dreams come true for the right price.
If you are a Seller and struggling to sell your unit, you need to talk to us. We can help.
Happy Healthy Prosperous New Year to All!
The Stark Team Specializes in Luxury Real Estate in Las Vegas and Henderson NV, focusing on homes and condos in Anthem Country Club, Green Valley, Seven Hills, Inspirada, Summerlin, Lake Las Vegas, and the High Rise Condos on and Off the Strip, TRUMP TOWER Vegas Condos, SKY Las Vegas on the Strip, Turnberry Place and Turnberry Towers, Panorama Towers, Las Vegas Lofts, Retirement Communities in Sun City Anthem, Summerlin Real Estate, and Foreclosures in Las Vegas and in Henderson NV.
Las Vegas Condo Experts: Lauren, Travis, and June
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LAS VEGAS FORECLOSURE LISTINGS
LAS VEGAS HIGH RISE INFO
THE ULTIMATE LAS VEGAS CONDO INFO WEBSITE
June Stark Lauren Stark-Scholl Travis Scholl
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