It was expected. Southern Nevada housing market has been buffeted by gale-force winds, brought to its knees by rampant overbuilding, unchecked speculation, foreclosed mortgages and weakened economy. That includes the luxury high-rise condominium segment that was once flying as high as the International Space Station. As predicted, prices in condos have retreated by long strides as well, not just in small steps.
The elegant and massive CityCenter project on the Strip, an $8.4 billion gig, has been sucked into the same spine-tingling spiral. It has three residence destinations to offer; Veer Towers, The Residences at Mandarin Oriental, Las Vegas, and Vdara Condo Hotel, totaling about 2,440 units. Buyers have so far dished out $313 million in down payments on roughly 1,500 of them. Now some of them are requesting the developer, MGM Mirage, adjust the price levels down to reflect today's sagging real estate market. So far the answer has been "Not so fast."
It looks like there aren't too many of the buyers behind the reduction request. Not yet anyway. In that light CityCenter can take its time in deciding what to do. If, however, more of them join in, then things can turn hairy.
Should that happen, one solution could be to keep the original price intact but offer the purchaser another unit in the complex to go with the original one. Like two for one deal. Predictably the luxury condominium sector in Las Vegas will remain soft for the foreseeable future, so this way MGM Mirage can at least move the inventory. There are currently around 1,000 unsold residences, after all. And the buyer now owns two units, free to be as creative with them as he pleases.
What about a lease-option? In this scenario the existing deposit stays, the buyer signs a lease for a set amount of years and has the right to close whenever he sees fit before its expiration. This would benefit both in many ways and avoid any nasty and costly court battles.
Despite the market being what it is, there are avenues that can be win-win for both sides.