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The Las Vegas
Real Estate Market
The grand opening of the new and beautiful signature mega-resort "Wynn - Las Vegas"
formerly Steve Wynn's "La Reve" and the
ongoing expansion of other strip hotels will, if history repeats itself,
bring thousands more residents to Southern Nevada in the next five years.
Las
Vegas remains at the top of the charts in some of the latest city rankings by
well recognized business magazines, according to Las
Vegas Chamber of
Commerce. "We are in a bigger
gold rush than California ever saw. It's been going on for 12 years and it is
longer and stronger than anybody ever anticipated." says
Richard.Lee, foremost expert and Vegas real estate
guru. The
projected boom on the strip for the next 60 months has begun.
Opportunities in all markets are being explored. Each new hotel room
creates about 2.5 jobs for the Las Vegas economy.
Click here
to see the view of the United States by job creation to better
understand the impact of new jobs on our economy compared to the rest of the
states.
Residential Market:
The Las Vegas residential real estate market is still thriving
although not at the heated rate it was 18 months ago. Prices rose nearly 6% last
year, and prices have moderated. There are still a lot of great
homes priced for every pocketbook . Since 1993, between 4,000 and 8,000
people a month have been relocating to Southern Nevada to enjoy a vibrant and
growing economy that is one of the most robust in the nation. Las Vegas is
constantly rated the number one city in the nation in job creation growth and it
keeps getting better!
For the region's home builders, investors and real estate agents, such
statistics are welcome news. Southern Nevada has more than 370 new home
tracts under development and an active resale market with nearly 12,000 existing
single family homes and condominiums offered for sale in the local MLS.
Projections
for new home sales in 2006 is nearly 26,000 new homes and 32,900 in expected re-sales. Home buyers can choose from a wide variety of life styles from apartments and
condominiums, to single-family homes, master-planned, gated and golf-course
communities, estate homes, and now, high-rise luxury condominiums.
Every hour 24 hours,
365 days a year, another two acres of Las Vegas land are developed for
commercial or residential use. Developers of master-planned
communities that dot the city’s landscape are running out of new street names.
The valley has about 76,000 acres available to builders
according to local real estate guru, Richard Lee.. With the current land
absorption rate of about 5,500 acres per year, the valley has about 13.8 years
of land left. "We're surrounded by land that is either owned by the government
or BLM (Bureau of Land Management) land," said Lee "Affordable land is
disappearing."
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Las Vegas Commercial Real Estate
Retail Market: Retail development
remains strong as residential development growth is projected to continue at
near record levels. Land costs in Las Vegas are generally continuing to
rise. Without a slowing down of land prices, commercial developments have
to consider the viability of their proposed development and be sensitive to the
realities of what the ultimate users can pay. Otherwise the retail real
estate market is quite healthy with low vacancy factors in good centers.
Concessions from landlords in the anchored centers remain few with little if any
free rent or additional tenant improvement allowances. The average asking
retail price is $1.64 NNN per square foot ("psf") to $1.70 NNN psf.
Speculative retail vacancy increased from 4.8% in Q1 to 4.95 in Q2 of 2005.
Older retail (built before 1995) lagged in rent and occupancy averaging about
$1.47 psf with vacancies down to about 5.7% average for 2005, depending on
location.
Office Market:
The office market is
currently doing better. Supply got a little ahead of demand last year but
absorbsions and demand have brought the vacancy factors down . Vacancy
rate is steady to declining and is currently at about 9.3% - down from 14%
high in 2002. Possible factors include the high level of asking rents and
the strong level of new office completions still being built.
Quality "class A" projects are still being build
and are in good demand.
Industrial Market: In the industrial market, the vacancy
rate is the lowest in four years.
The amount of available inventory in the industrial
market is rapidly diminishing and future supply could be constrained because of
land and construction prices.
Vacancy rate has decreased from 9.7 percent in
2003 to 4.5% in the 3rd quarter of 2005. The
industrial market and demand is still pretty decent. With the drop in
vacancy and the low availability of industrial land, the asking price in valley industrial space for
2005 and 2006 is on the rise and varies between $.60 psf to $1.25 psf depending
on location and amenities.
The strongest performance was in East Las Vegas where long-vacant
Warehouse/Distribution space was finally leased bring the sub-markets industry
rate down to 2.9%, the lowest in the valley and matching The Airport and West
Central sub-markets.
Multi Family Market:
The demand for land to
build multifamily is hot! Apartment builders added 1,724 new units by the
end of 2005.Recent condo conversions and the lack of land has suppressed large
multifamily developments. Rents are on the rise and demand is high and not
being met by current construction. Land is hard to find and developers are trying
to down zone commercial property to build multifamily. Land and
construction cost have risen dramatically and developers have shifted their
efforts to condos. Vacancy fell about 90 basis points to about 3.7 %
by the end of 2005. The high rate of job growth and people moving to Las
Vegas coupled with the rise in housing costs is maintaining a high demand.
Cap rates on quality multifamily units are low 4.2% to 6.6% with the
medial price of a unit at the end of 2005 reaching $89,000.
The apartment vacancy rate in the Las Vegas
rental market has dropped from the 6 to 8 percent range in 2003 to 3.3 percent
in 2006. Higher employment
growth and stronger absorption in 2006 are expected to reduce vacancies even
further
by the end of the year. Asking rents are forecast to rise by 5% this
year. Market fundamentals are expected to drive rents higher as the huge
construction boom starts again for the next 60 months. Interest by investors and the belief that the multi-family market will continue to be underserved in the
coming years coupled with rising rents is expected to fuel the demand for
existing units and the building of new ones.
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All information is from sources deemed
reliable but not guaranteed. "Prime Source Real Estate
Services" is a division of Prime Source Commercial LLC.
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do not discriminate against any person on the basis of race, color,
religion, gender, disability, family status or national origin. |
