As I had written in my last post, I was even a little disappointed at the lack of sales for Loft 5 at the conclusion of my visit to Loft 5 on South Las Vegas Boulevard.Buyers would get a 1570 square foot well built luxury loft on the South Las Vegas Strip that is packed with amenities, easy access to I-15, The Strip, word class shopping and dining. Two more casinos will be built on Las Vegas Boulevard and Saint Rose plus a number of other significant projects that is sure to benefit this area and help in future price appreciation.
Las Vegas Boulevard is recognized as one of the five best America’s streets along with Michigan Avenue in Chicago and it upsets me to see the price per square foot of luxury condos and lofts to be far less than an average flat or apartment in London or Paris. I am talking about location as I am discussing these projects as an investment because many buyers for these loft and condo projects are snow birds or investors.
The amenities and upgrades in these Las Vegas lofts include: Custom cabinets, sub zero refrigerator, Wolf appliances, 4 pools, 5 spas, fitness center, saunas, fire pits, limestone flooring in kitchen and baths and more.
Loft 5 has four basic models:
Loft A has two models. One is about 1638 square feet, 1 bed room, one loft and 2.5 baths and the other is a 1700 square foot 2 bed room, 2.5 bath loft. SalesTraq, which is like the MLS for new homes and condos for sale in Las Vegas shows the opening price for this model was $544,900 in June 2007 and a price increase to $571,900 and $578,000 as of February 2008, go figure! The builder is offering 10% off this price for buyer incentives which brings the price down to $514,000. The all important price per square foot is about $338/square foot.
Loft B has two models also: 1770 square foot, one bed room one loft with 2.5 baths for $553,000 and the 2 bed room 2.5 bath 1800 square foot models for $566,000. The price per square foot for these lofts after a 10% discount is about $312 and $314 respectively.
Penthouse C is the other model, this 1300 square foot 1 bed room 1.5 bath penthouse lofts is priced at about $515,000 after the 10% builder’s contribution to buyer’s closing costs, etc, price per square foot of $457.
Penthouse D lofts have two models. One is 1937 square foot and is priced at $733,000 after the builder discount. The price per square foot for these penthouse lofts are only $378. The other larger penthouse loft is 2409 square feet at $848,000 which brings the price per square foot to $352. Yes, Loft 5 offers a penthouse loft on the South Las Vegas for $352/square foot. This price was unimaginable a couple of years ago and will be gone in a few years.
So again, why is the builder not selling these Las Vegas luxury lofts briskly? The answer is resale condominiums, foreclosures and short sales condos and lofts in their own buildings or immediate area.
There are currently nine lofts, in Loft 5 listed for sale in the Greater Las Vegas MLS.
One 1638 square foot model A loft for $475,000 asking price or $275 per square foot.
Two 1340 square foot Penthouse lofts for the asking price of about $454,000 or $348 per square foot, this unit has a 500 square foot balcony.
Three 1823 square foot model B lofts which are listed for $479,000 or $263 per square foot, $499,000 or $274 per square foot and the last one is priced at $540,000 or $299 per square foot.
Two penthouse D lofts which are 1936 and 1963 square feet respectively are offered for sale for $669,000 and $709,000. The prices per square foot for these penthouse lofts in Loft 5 are $346 and $361.
It should be noted that none of these units are short sales or foreclosures as Loft 5 started selling in June 2007 and by that time the mortgage stuff had hit the fan. However it is easy to see how these units undercut the Loft 5 builder’s pricing.
For model A lofts the resale loft undercuts builder’s price by $39,000 and remember this an asking price with room for negations.
The resale 1340 square foot model C penthouse loft price is $60,000 below the builder’s price.
The cheapest 1823 resale model B loft undercuts the builder’s price by $87,000 and one of the 1936 square foot model D penthouse lofts is listed for $64,000 less than builder’s price.
Now, nine resale listings out of 270 units should not affect the builder that much, actually if I was the builder, I would buy back these lofts and keep my prices steady. The problem is that Loft 5 is not just competing with its own resale units; it has to compete with resale condominiums, REO (bank foreclosure) condos and short sales in other luxury condo communities in its immediate area such as Manhattan, Park Avenue and Boca Raton.
More on how Las Vegas foreclosures, short sales and resale condos affect new luxury condo projects in South Las Vegas Boulevard (Strip) particularly, and Greater Las Vegas area generally.
A note of caution for those who are waiting for an even worse real estate market in Las Vegas in order to find an even greater bargain than a penthouse loft in Las Vegas Loft 5 for a bargain price of less than $340 per square foot:
The last I checked Loft 5 has not moved to another location, it still is close to world class shopping and entertainment and their hotel like interior did not fall apart. The only reason these great lofts are not flying off the shelf is the current downward real estate pricing trend in Las Vegas.
The only thing Loft 5’s builder did wrong is that his grand opening was in 2007 and not early 2004. Had the grand opening been in 2004 the seller could price their units at $500 plus per square foot, a buyer’s line would start forming by the gate 10 days prior to the grand opening and those who won a lottery to buy these lofts would come out of the sales office, beaming like a lottery winner. Like Mr. Greenspan said, the markets are greatly affected by faulty human nature.
I am not saying that any condo project in Las Vegas is in distress, but if one was, a mountain of money is sitting on the sidelines ready to snap up distressed projects or properties at fire sale prices and in bulk. Not that I have anything against those who have a mountain of money, actually, give me a call if you read this! If it comes to that, new money will come to own these properties and in turn, will want a chunk of profit for flipping them. The original builder’s or previous owner’s loss will be their gain and not yours. As a Chinese proverb states, be careful of what you wish for, you just might get it.
Related web-site links: getting the best deal for a Las Vegas condo, Las Vegas condos for sale, short sale condominiums, Las Vegas foreclosed condos, Buying Las Vegas condos for sale, Las Vegas residential real estate market news
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