Southern Nevada hardly had any condominium market just a few short years ago. Especially the high-rise component was pretty much non-existent, save the Regency at Las Vegas Country Club. Then the Turnberry Place was built and it proved hugely successful and things sort of got fired up from there. Over time Vegas had created a reputation that no matter how many new hotel rooms were built, they always got filled with eager visitors. Many of the developers who wanted to come to town and follow the Turnberry recipe, apparently bought into that same idea. Just keep putting them up, condos that is, and they'll come.
They did come early on in the boom cycle, that's true, but things have slowed down considerably now. Many who did recently have aspirations to purchase a unit here are holding off as the market reports aren't that favorable any more. Demand has nearly dried up in the more expensive price points and with that comes the inevitable, prices start sinking.
The mortgage industry that is currently battling severe turbulence is very cautious today with its money. Who can blame it? Even condos that have sound contracts on them have frequently difficulty closing. Lenders are almost as a rule taking second and third looks before making any commitments and closings can stretch from two-three months to whenever. They are skeptical about appraisal values and often ask buyers to put more money down which they may or may not have. They are underwriting loans over and over again, making sure that all the bases are covered. An issue that must also be on their minds is any potential legal challenges from buyers or vendors. And what is the owner-occupant vs. investor ratio in a given high-rise.
Here's a brief statistical rundown on the closing picture. Las Vegas developments with over 50 condos in them had 2,558 escrows opened from the beginning of 2008 and of those 77% remain in escrow today. That tells us something. Looking back to 2007, a total of 3,095 condominiums in the same group were placed in escrow and out of those about a third are still languishing in escrow. The published sales numbers in many of the high-rise projects may be impressive, but when the actual closing percentage of those is scrutinized, the picture can change dramatically.
One of the recent exceptions is the Panorama Towers where the twin buildings have a closed sales percentage in the high 90s. That's rather remarkable. Cash can be a big help, too. Palms Place that started selling its 599 units earlier this year has sold over 100 of them to cash customers. That's one way to close quickly, so long as you have the money.