At a median price of just over $50,000, it's easy to see why condos and townhomes are being snapped up by investors all around Las Vegas Valley.
They're spinning off cash flow of 10 percent or higher, even with homeowners association and rental management fees, said Frank Nason, president of Residential Resources in Las Vegas.
He reported 476 condo sales in October, compared with 508 in September and 469 in the same month a year ago.
Numbers exclude high-rise condos.
The median price fell 8.7 percent from a year ago to $50,213. That's up 4.6 percent from $48,000 in September.
"It's crazy. As bad as the single-family home market has been hit here, condos have just gotten the stuffing kicked out of them," Nason said Wednesday. "There's deals everywhere. It's hard for me to believe condos could get any lower. It's almost a sure bet."
Prices for condo conversions soared a few years ago, reaching $200,000 for a two-bedroom, two-bath unit. They were expected to recede to $135,000, maybe $115,000 at the worst, but to see them selling at $50,000 to $55,000 today is unbelievable, Nason said. He's seen conversions on the east side of town going for $30,000 to $35,000.
More than half (52.3 percent) of October's condo closings were real estate-owned, or bank-owned, while 24.4 percent were normal sales and 23.3 percent were short sales for less than the principal mortgage owed.
While the median value of single-family homes continued to trend downward in October, condo closings increased in all three sales categories for the first time since Nason began tracking transactions by sales type.
The median for normal sales rose from $51.70 a square foot in September to $57.30 in October; median short sales from $50.84 to $52.03; and median REO from $47.89 to $50.43.
Otherwise, there were no surprises in October's statistics, Nason said. Cash transactions still account for 90 percent of sales as private financing for condos has practically dried up. Eight percent of sales received institutional financing.
Condo buyers historically are empty-nesters, retirees or young people looking to live within a 3-mile radius of work or school. Some of them are second-home buyers thinking about retirement in the next five years, a lot of them coming from snowbelt states such as Ohio, Pennsylvania and New York, Nason said.
Contact reporter Hubble Smith at firstname.lastname@example.org or 702-383-0491.