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Is the Las Vegas High Rise and Luxury Condo Market about to Collapse?

Is the Las Vegas High Rise and luxury condo market going to become another victim of the Las Vegas foreclosure fallout.
Vegas realtors Kendall Trotter and Steve Hawks discuss the possible upcoming crisis in the Las Vegas high rise and luxury condo market.

Signs of Vertical Vegas becoming flat are starting to become more evident every day. The high home owner association fees were not an issue when these units were originally purchased because most buyers were looking to stay in for the short term and flip the unit. When the units were not flipping and the units became too expensive to maintain the first thing the owners stop paying was their home owner association. Some home owners associations are on the verge of being broke. Many units ranged from five hundred thousand to several million dollars.The results are disasterous and a crisis is looming,amenities are being drastically cut from security to landscaping.

Some owners are taking turns on shifts for security, some actually have to do the landscaping because the landscapers were not getting paid and quit, the hallway carpets in some complexes are stained and smell like vomit from Vegas partiers that rented units form owners getting foreclosed on, some complexes only turn on half the lights to save on the power bills, repairs are not being made and some have shut down the gyms and pools. Residents who are left also complain about the constant beeping from vacant units from the smoke detectors due to no power in the adjacent units The Las Vegas high rise market is not the only market seeing these effects, San Diego and Miami have also been victims to the foreclosure fall out.

Many complexes have over a hundred units for sale.One complex is reported to have over 110 units not paying HOA fees and is now receiving close to $80,000 less a month than expected.Owners wanting out are having a horrific time unloading them.
One reason many have dropped in price so much they owe more than its worth, many were fraudulently purchased with large sums of cash back and no payments made which has caused more foreclosures and further downward pressure. Units that were once 1.4 million are now $700,000, units that were $600,000 to $ 900,000 are now $350,000 to $600,000 and are continuing to free fall with no end in sight.

This is putting an enormous supply on the market it's also scaring away and decreasing demand.Potential buyers do not want to buy an investment with a huge unknown. If the HOA is low on funds then the HOA will have to raise the monthly HOA or charge a huge assessment to cover the cost.

Very few consumers will want to take a chance of not knowing the cost of an investment in the future.

No matter how low they go who wants to take a risk on an unknown cost in the future that could wipe out your entire profit.

If you are going to buy a Las Vegas High rise or Luxury condo it is now more important than ever to thoroughly inspect the HOA resale package that the seller must provide by Nevada Real Statutes. Specifically scrutinized the budget page and confirm the home owner association does not have a cash flow problem, check their expenses and future expenses, verify how many units are for sale and verify how many units are vacant.

These will be good indicators of how many owners are actually paying the HOA. For more information on this subject watch this edition of Las Vegas Real Estate Update or Contact Las Vegas Realtor Steve Hawks and Kendall Trotter at 888-918-BANK.

 

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