Full recovery seen for valley single-family homes by 2011

Home prices will decline another 5 percent to 10 percent in Las Vegas this year, but sales volume will turn around in 2010 and structural demand for 23,500 new homes will be reached by 2011, a real estate analyst said Wednesday.

Marta Borsanyi, principal of Newport Beach, Calif.-based Concord Group, forecasts a full recovery for traditional single-family suburban homes by the fourth quarter of 2011. Full recovery is defined as one new-home sale a week in each tract project and low single-digit price appreciation.

Las Vegas is a unique market and doesn’t conform to national model projections for housing recovery, Borsanyi said. More than other U.S. metropolitan areas, demand for housing comes from people outside of Las Vegas, primarily retirees, second-home owners and investors, she said.

The pendulum in Las Vegas tends to swing with the number of new hotel rooms opening. With some 15,000 rooms scheduled to come on line in 2009, employment and population will show marginal growth, a key to home sales activity, Borsanyi said.

"No question this is worse than other recessions, but the reason we see light at the end of the tunnel, we know, is because of the number of hotel rooms," Borsanyi said. "They’re not going to be mothballed. They’re going to market the living daylight out of them."

In a February report on Las Vegas’ housing outlook, Concord Group showed an oversupply of 48,000 available units, including standing inventory, available lots and recently built foreclosures. About 11,000 of those are high-density units, the majority of which are condo-hotel units.

Borsanyi examined two models — demographic growth and hospitality and gaming employment — to forecast structural demand for new homes, a major element to drive market recovery.

Her projection of 23,500 units is based on the creation of 115,000 new households, or an average of 3.3 percent annual growth, over the next five years. That’s lower than all but two years since 1970.

The primary driver of Las Vegas’ economy is the hotel and gaming industry. Between 2008 and 2010, about 25,000 hotel rooms are projected to open, or 8,300 a year. That’s a significant increase from 6,300 rooms, or 1,050 a year, added from 2002 through 2007, Borsanyi noted.

"You have a unique market where a single employment type generates changes — the hotel industry," she said. "Detroit was like that with cars, but not anymore. You have a lack of excitement when there are no new attractions. If it was less and less and less, then yes, it could be Detroit. However, in 2009 you get 15,000 new rooms, so it’s getting back on a positive track."

Borsanyi said the current recession is affecting the market stronger than previous downturns because job losses in construction outweigh growth in gaming and hospitality. She estimated 1.55 jobs for every new hotel room, based on a random hotel sample of 50,924 rooms with 79,000 employees.

Foreclosures dominate the market, accounting for nearly three-fourths of resale activity in 2008, and that’s why prices continue to drop.

Home Builders Research reported median existing-home price at $155,000 in January, a 35.4 percent drop from the same month a year ago. New-home median prices fell 14.6 percent to $234,173.

The threat of future foreclosures continues to depress pricing, Borsanyi said. Nearly half (47 percent) of Nevada mortgages are "upside down," or have negative equity.

Distressed property sales are attractively affordable, another positive demand indicator, she said.

"This is where the smart money buys, so there are opportunities, basically is what we’re saying," Borsanyi said. "We shouldn’t be crying so much, ‘Why is it bad now?’ Because it was so good."

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.

A Facebook-branded space inside of Macy’s at the Fashion Show shopping center
A Facebook-branded space inside of Macy’s at the Fashion Show shopping center will showcase 13 small businesses in November and December and seven in January. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
T-Mobile uses ticketing data to plan for event
T-Mobile Executive Director of Arena Operations explains how ticket sales data and demographics help plan staffing, vendors, parking and operations for an event.
Costco opens its doors in southwest Henderson
Costco has opened its fifth Las Vegas-area location near the intersection of St. Rose Parkway and Amigo Street. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas strip mall and office park
The Krausz Cos. and WG Group bought a strip mall and an office park in Las Vegas for nearly $80 million total. They acquired a portion of Tropicana Beltway Center in the southwest valley for $59 million. They also acquired the Westbay office complex in the Las Vegas Medical District. The buyers are former owners of The Gramercy, a once-mothballed mixed-use project in the Las Vegas suburbs. They sold The Gramercy in phases for more than $100 million.
Mario Barth talks about the growth of the tattoo industry
Celebrity tattoo artist and business owner Mario Barth talks about the growth of the tattoo industry at The World of Tattoo industry trade show at Planet Hollywood in Las Vegas
$7.5M Las Vegas pot dispensary opens near Las Vegas Strip
Planet 13, which bills itself as one of the largest dispensaries in the world, opened to the public Thursday. It has entertainment including an interactive floor and floating orbs. (K.M. Cannon/Las Vegas Review-Journal)
Caesars CEO to step down next year
Caesars Entertainment Corp. CEO Mark Frissora will leave the casino company in February. Frissora has been CEO since July 2015. He was named CEO right after Caesars' operating company filed for Chapter 11 bankruptcy protection Caesars Entertainment emerged from bankruptcy protection in October 2017 Before Caesars, Frissora spent seven years as chairman and CEO of Naples, Fla.,-based Hertz He led the consolidation of the rental-car industry through Hertz‘s acquisition of the Dollar Thrifty Automotive Group.
Planet 13 in Las Vegas adds twist to marijuana dispensary look
Planet 13, which bills itself as one of the largest dispensaries in the world, opened to the public Thursday. The dispensary is located near the intersection of Desert Inn Road and Sammy Davis Jr. Drive, near Trump International, in Las Vegas. Planet 13 has plans in the future for a coffee shop, a tasting room for marijuana-infused beer and wine, a lounge for consuming marijuana on site if that is legalized and space for food.
Caesars Entertainment opening 2 resorts in Dubai
Cove Beach will open on Meraas’ Bluewaters Island in Dubai in November and Caesars Palace Bluewaters Dubai and The Residences at Caesars Palace Bluewaters Dubai will open in December. (Caesars Entertainment)
Bellagio, MGM Resorts International’s luxury hotel turns 20
The more than 3,000-room Bellagio hotel is situated on the site of the former Dunes Hotel. The Dunes was imploded in 1993, and construction of the Bellagio started in 1996. It cost $1.6 billion to build, making it the most expensive hotel in the world at the time. The Bellagio was former Wynn Resorts Ltd. Chairman and CEO Steve Wynn’s second major casino on the Strip after The Mirage. MGM Resorts International acquired the property from Steve Wynn in 2000. (Tara Mack/Las Vegas Review-Journal)
Facial recognition software at G2E – Todd Prince
Shing Tao, CEO of Las Vegas-based Remark Holdings, talks about his facial recognition product. (Todd Prince/Las Vegas Review-Journal)
Former NBA player, Shaquille O'Neal, speaks about his new Las Vegas chicken restaurant
Former NBA player, Shaquille O'Neal, speaks about his new Las Vegas chicken restaurant. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Bobby Baldwin to leave MGM
MGM Resorts International executive and professional poker player Bobby Baldwin is set to leave MGM.
Caesars has new armed emergency response teams
Caesars Entertainment Corp. has created armed emergency response teams. They are composed of former military and law enforcement officials. "These teams provide valuable additional security capabilities,” Caesars spokeswoman Jennifer Forkish said. Caesars is hiring Security Saturation Team supervisors, managers and officers, according to LinkedIn. The company did not say how many people it plans to hire for the units. (Las Vegas Review-Journal)
Las Vegas, airlines prepare for CES
CES in January is expected to attract more than 180,000 attendees. (Las Vegas Review-Journal)
AGS partners with Vegas Golden Knights
AGS is the nation’s second-largest manufacturer of Class II slot machines used primarily in tribal jurisdictions. It announced a marketing partnership with the Vegas Golden Knights NHL team. (Las Vegas Review-Journal)
Lehman Brothers bet big on Las Vegas
Lehman Brothers collapsed 10 years ago, helping send the country into the Great Recession.
Fremont9 opens downtown
Fremont9 apartment complex has opened in downtown Las Vegas. (Marcus Villagran/Las Vegas Review-Journal) @marcusvillagran
Ross & Snow launches in Las Vegas
Luxury shoe brand Ross & Snow has opened in Las Vegas, featuring "functional luxury" with premium shearling footwear. (Bailey Schulz/Las Vegas Review-Journal)
Remote Identification and Drones
DJI vice president of policy and public affairs discusses using remote identification on drones. (Bailey Schulz/Las Vegas Review-Journal)
Drones and public safety in Nevada
Two representatives in the drone industry discuss UAV's impact on public safety. (Bailey Schulz/Las Vegas Review-Journal)
Frontier Airlines to launch flights from Las Vegas to Mexico
Frontier, a Denver-based ultra-low-cost carrier, will become the first airline in more than a decade to offer international service to Canada and Mexico from Las Vegas when flights to Cancun and Los Cabos begin Dec. 15. (Rick Velotta/Las Vegas Review-Journal)
MGM Resorts International CEO Jim Murren addresses Oct. 1 lawsuits
MGM Resorts International Chairman and CEO Jim Murren addresses criticism his company has received for filing a lawsuit against the survivors of the Oct. 1 shooting. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International opens the doors on MGM Springfield
Massachusetts’ first hotel-casino opens in downtown Springfield. The $960 million MGM Springfield has 252 rooms and 125,000-square-feet of casino. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International prepares to open MGM Springfield
Las Vegas-based MGM Resorts International gave news media and invited guests a preview of the $960 million MGM Springfield casino in Massachusetts. The commonwealth's first resort casino will open Friday, Aug. 24. (K.M. Cannon/Las Vegas Review-Journal)
A Walk Through Circus Circus
It only takes a short walk through Circus Circus to realize it attracts a demographic like no other casino on the Strip: families with young children. (Todd Prince/Las Vegas Review-Journal)
Morphy Auctions, a vintage slot machines seller, wants gaming license
Vice president Don Grimmer talks about Morphy Auctions at the company's warehouse located at 4520 Arville Street in Las Vegas on Thursday, Aug. 16, 2018. (Rick Velotta/Las Vegas Review-Journal)
News Headlines
Add Event
Home Front Page Footer Listing
You May Like

You May Like