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Las Vegas Takes a Tough Stand Against the Recession - 13 October 2009
A few years ago, Las Vegas was one of the hottest real estate markets in the U.S., the city where values were only going to appreciate and developers were going to keep on building until the Nevada dessert was satiated with luxury hotels, homes and condos. While that bubble has burst, Sin City refuses to surrender to the country’s tragic economy.
Sure, tourism is down—about six percent so far for 2009—but not as much as in other gambling towns like Reno and those along the California coast. Homes in Vegas are back to the pre-boom average prices of $205,000, creating another buyer’s market. And though hotels struggle to occupy rooms, the recession hasn’t stopped MGM Mirage from completing their $8.6 billion CityCenter, touted as an “unprecedented urban metropolis” with a 4,000-plus room gaming resort, 2,400 condos and luxury non-gaming hotels.
As a matter of fact, to fill their condo-hotels and residential towers, CityCenter has recently reduced prices by 20 to 30 percent. Units that once sold for $1,000 to $2,000 per square foot are now selling for under $1,000 per square foot. Condos in the CityCenter's 670-unit Veer towers are priced less than the average cost to build the units.
One buyer who had $900,000 taken off the price of his $2.9 million condo before escrow is not only pleased with his discount, but also believes his purchase still makes a great long-term investment. Condo-hotels like CityCenter are operated like hotels in that owners can rent them nightly, sharing proceeds with hotel management. Therefore, when economy picks back up, owners stand to make a fair profit.
About 55 percent of CityCenter’s condo and condo-hotel units have already been sold. MGM Mirage is confident that investors will continue to see the value in the premium “metropolis,” especially once construction is completed by the year’s end.
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