Although rental rates have increased, developers have found that the current unit density of 18 to 25 units per acre will not provide enough rental income to justify apartment (instead of condo) construction. Increased density in the form of mid-rise and high-rise construction is the solution and our expectation of the current trend
Las Vegas, Nevada (PRWEB) July 29, 2005
Appraisers of Las Vegas.com predicts a vertical growth trend in Las Vegas real-estate development. They expect more high-rise projects of all types Â condos, offices and even apartments.
Don Foster Scoggins, president of Appraisers of Las Vegas.com, issued his prediction for the Las Vegas real estate marketÂs future over the next few years. His conclusion: a dwindling supply of centrally located vacant land and continued heavy demand will mean higher land prices. That all means more high-rise buildings will fill the Las Vegas skyline.
A Las Vegas Appraiser
"Increasing land prices are driving much higher density development. Even the office market is going vertical. The downtown Las Vegas' development plan, for instance, is high-rise office construction with retail space on the first levels, with the aim at attracting the younger clientele by use of hip, new restaurants and nightclubs," said Scoggins in a statement released by Appraisers of Las Vegas.com. His experience in the real estate appraisal business -- he has run the Vegas appraisal firm for 10 years -- gives Scoggins a broad perspective on the Las Vegas real estate market.
Scoggins cites the rising cost of land (more than $200 per square foot along Las Vegas Boulevard in some cases) as the incentive for these new high-rise developments. Las Vegas land values rose 150% in 2004.
An Appraisal of Clark CountyÂs Residential Market
Appraisers of Las Vegas.com sees continued growth in Clark County real estate, where the population has steadily increased by about 5,350 new residents per month (CBER, UNLV) since 2000. Appraisal statistics show that the median price of a new home in the metropolitan Las Vegas area rose from $147,750 in 1999 to $290,287 in 2004; a 96% increase in just four years (SNHBA, 2005).
"I expect a slight correction in the residential market downward, and then a resumption of steadily increasing values. Because certain pockets of the residential market have shot up so drastically, some residential product is over inflated. Some homes that have been built only a few feet away from each other on tiny lots seem to be overpriced. A correction is expected when the overheated demand from the summer decreases. While home prices have increased almost 100% (doubled!) in the past five years, the median home income has increased only 10%. I am refinancing my home now because I do not think appraised values will be as high as they are now for years,Â Scoggins said.
An Appraisal of the Vegas Rental Market
The supply of apartments has not kept up with demand in Las Vegas. As developers continue to convert apartment units into condos, apartment units are in short supply, pushing up prices. Appraisers of Las Vegas Vegas.com cited the case of a 346-unit apartment complex that sold in January 2005 for $18.5 million, recording an appreciation of $5,750,000 over its purchase price seven months earlier.
Appraisers of Las Vegas.com sees apartments following the trend toward high-density projects. "Although rental rates have increased, developers have found that the current unit density of 18 to 25 units per acre will not provide enough rental income to justify apartment (instead of condo) construction. Increased density in the form of mid-rise and high-rise construction is the solution and our expectation of the current trend," Scoggins said.
About Appraisers of Las Vegas.com:
Appraisers of Las Vegas.com have over 30 appraisers on staff with over 400 years of combined experience. The Las Vegas appraisal firm does appraisals on real estate ranging from houses to high-rises and condos to casinos across the entire state of Nevada.
Don Foster Scoggins
Appraisers of Las Vegas.com
(702) 253-9872 or (877) 243-9872 (toll-free)
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