Livin’ La Vida Vegas: Revisiting The Crater of The Recession

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Single Family Resales Only

News media loves the biggest car crash, so during the Recession, Las Vegas and a few other cities were ever-present in the headlines of bad real estate news.  The table above illustrates how deep the crater went and how far it’s returned to pre-Recession levels. For homebuyers in the market, you may have missed out on the gains from the depths of the market, but there is still room for building equity.

I say that because, as of March 2018, The Greater Las Vegas Association of Realtors reports just over a month’s supply of homes on the market with roughly 30 percent fewer homes listed this past year (but 6.4 percent more condos).  Couple that with a 15.7 percent year-over-year increase in single-family home sales prices and a 30.1 percent increase in condo prices. That translates into a median single-family home selling price of $280,000 and $160,000 for condos and townhomes.  That compares with a historical average of 5 percent annual appreciation.  All this activity and you’d think you were in Dallas.

Speculators, a big part of the housing pop and recovery, are slowly declining. As of March, 25.2 percent of buyers paid cash versus the February 2013 peak of 59.5 percent.

The increase in equity has dramatically reduced the number of foreclosures (38) and short sales (86) currently available. For Texans not used to reading about actual sales data, Nevada is one of the majority of states that discloses real estate transactions.

Aside from a nationwide return to buoyancy in real estate, Las Vegas, like most areas, is a victim of years of underbuilding. Pre-bubble, there were over 1,100 subdivisions under construction. Today there are approximately 300. Historically, new and existing homes sales were about 50/50, but today, new home sales are only about a quarter of home sales.

Net-net, Vegas is hot.

Regency Towers

Built in 1974, Regency Towers is located at 3111 Bel Air Drive, actually inside the Las Vegas Country Club.  The units are large, starting at a 1,244-square-foot, one-bedroom, two-bath unit, but most are 1,856-square-foot, two-bedroom, three-bath units.  Yes, the building is 44 years old and has the problems endemic to most buildings this age.  Residents are older and maintenance has been allowed to slip. One large issue involved cracked sewer pipes that required all the pipes to be lined that seems to have been repaired. The building is also chunking through a long list of delayed maintenance, the result of older owners letting things go to seed.  As long as stuff is getting fixed … and you’re not on the hook to pay for it.

Is it me or does Regency Towers pool look like a casket?

So why am I talking about this?  Opportunity.

Regency Towers, surrounded by golf course with Strip and mountains in the distance

High-growth Las Vegas will continue to become denser. Properties near The Strip will be snapped up for high-rise developments. Views will change with unpredictable consequences.  However, a building located inside an 18-hole golf club has protection from super-close view blockage. I won’t say the golf club can’t be built on, but with Regency Towers and a crop of single-family homes intertwined with the course, it’s pretty unlikely. Whether it’s a Strip or mountain view, they’re pretty endless.

Unit 27F is the crème de la crap. You know this because it’s priced at $295,000 for 1,856 square feet ($159 a foot) and the listing only shows a couple of view pictures.  The chandelier above hints at the state of things, but the view is unquestionable.  HOA dues are a reasonable $909 a month and property taxes are said to be $1,727 per year (a heck of a lot less than Dallas and Nevada also has no state income tax). FYI, if you’d like something a pinch smaller with a Strip-facing view, unit 27C is a 1,534 square foot 1/2 on the market for $225,000 or $147 per foot and is in equally dire condition.

The view also includes a large wrap-around patio for those winter days when you won’t burst into flame in the desert heat.  As you can see, the carpet of golf course green buffers the building from encroachment.

But what could this unit be with a renovation?  Coincidentally, unit 10F is also for sale and it’s been redone. Listed for $389,999, or $215 per square foot, you can see that at a $95,000 delta, 27F begins to price in a renovation and gets you 17 stories higher. I say “begins” because as I write this, 27F has been on the market for 271 days after being owned by its current owner for five months and that prior owner for a single month. In fact this unit has been sold in 2009, 2011, 2016 and 2017. There’s clearly a story here that will either lead a buyer to a bar or a bargain.

Excuse the GLVAR watermark. The uppity MLS watermarks every photo on every website.

Unit 10F

The entry has a convenient bathroom before urging you down the hall to the main living areas.  On the right after the bathroom is a corridor that takes you to the bedrooms. In the distance is the dining room. The left wall is the back wall of the kitchen (unseen is a left hallway taking you to the main living area).

Entering the main living area you’re greeted with floor-to-ceiling windows (as you should in any high-rise). Behind the TV is the kitchen that’s been partly opened to the living and dining rooms.

Moving towards the windows you can see a corner of the opened kitchen and the dining area.  Remember that terrible chandelier in the 27F photos?  Now you know where that picture was taken.  It’s worth noting that the dining area has been bumped out making it three-sides glass, improving the view.

While the kitchen is open, I’d have rejiggered the layout. As it is, the fridge is kinda outside the actual kitchen. I might explore how I could have fiddled this design. But for the casual cook, it’s freshly redone and ready to go.  As a second shelter, it’s move-in ready without having to worry about remote control renovations.

The view from the kitchen definitely is definitely worth taking some walls down. After all, windows and sweeping views are two of the main reasons for buying a high-rise.  Also, remember, this is the 10th floor. Up on 27, things are even better.

Trust me that the two bedrooms are large. But I figured the bathroom was more important to show.  It’s as renovated as the rest of the unit.  Being the 1970s, when standing at the dual-vanity, you see the open bedroom reflected in the mirror. I’d have pocket-doored that closed.  Left and right are the walk in closet and the toilet-bath areas.

Finally, here’s a better shot of the view from the 10th floor. Imagine 17 floors north.  And that’s the question.  Is the work of renovating the 17th floor worth the trouble given the $95,000 difference in price?  That money would go a long way towards ripping out some walls, redoing floors, fresh paint and gutting the kitchen and bathrooms.   Me?  The 27th floor all the way, no question! After all, Las Vegas and Frank Sinatra go together. He sang about doing it “my way,” and so can you.

Protected lands encircle Las Vegas, preventing growth

Not all Blackjack and Triple 7’s

There are also concerns to understand before embarking on a Vegas move.  First and foremost is water. There isn’t much that’s not dammed from the Colorado River and stored in large reservoirs (that continue to shrink). As California and Arizona also tap those same sources, these desert cities will have to begin making hard choices about water. Relocators trusting Scarlett O’Hara’s “Tomorrow is another day” worldview may have regrets. The Las Vegas Country Club where Regency Towers is located likely has its own water rights, check.

Also, something most don’t consider given its location seemingly in the middle of a vast desert, is that it’s quite possible Las Vegas will run out of buildable land.  Stretching north of Las Vegas for nearly 200 miles are Nellis Air Force Base, Desert National Wildlife Refuge, Nevada Test Site and the Nellis Air Force Range. Encroaching on these lands literally requires an act of Congress.  To the west and south are the Red Rock Canyon and Sloan Canyon National Conservation Areas. Go east and run into the Lake Mead National Recreation Area.  Las Vegas is more bookended than you think.  Many argue that few expansion options coupled with water issues will be the limiting factors to physical growth.

Las Vegas can be a fun getaway city with reasonably priced real estate, but before you take the plunge, do your homework and don’t be afraid of a bargain.

 

Remember: When I’m not stirring up trouble in Dallas, Texas or Honolulu, Hawaii for Candysdirt.com and SecondShelters.com, I’m off scouting interesting locations for a second home.  In 2016 and 2017, the National Association of Real Estate Editors recognized my writing with two Bronze (2016, 2017) and two Silver (2016, 2017) awards. If you’re a Realtor with second home clients who’d like me to feature their journey, shoot me an email sharewithjon@candysdirt.com. Be sure to look for me on Facebook and Twitter. You won’t find me, but you’re welcome to look.