The Las Vegas high-rise market, which slumped in 2020 due to the COVID-19 pandemic, resurrected in 2021 with one of the strongest first quarters ever, partly due to a surge in sales at Trump International on the Strip.
Even the segment with closings of $ 1 million and more had one of the strongest quarters of all time.
The strength of the high-rise market extended into April, when the highest reported price per square foot ever paid for a strip condo was set at The Cosmopolitan. The highest skyscraper sale of the year, $ 4.35 million, was in a penthouse in Sky Las Vegas in April.
Research firm Applied Analysis reported that there were 224 high-rise closings between January and March, which is less than half of the 505 for 12 months of 2020 and well above the 150 in the first quarter of 2020.
The 224 are the top-selling since the third quarter of 2018 when it was 227. The firm is tracking 21 high-rise buildings, most of which are on or near the Strip.
“Thinking back to that time a year ago, sales activity, particularly in the resort corridor, dwindled and there was increased uncertainty when the Las Vegas Strip resorts closed for 78 days,” said Brian Gordon, principal of applied analysis. “It seems that the demand for vacation trips to southern Nevada is pent up. It will be interesting to see how this could translate into demand for real estate within the resort corridor in the second half of this year. “
Las Vegas realtor and realtor Anthony Spiegel, a member of the Ivan Sher Group of Berkshire Hathaway HomeService, Nevada Properties, had the highest sale of the year on Sky Las Vegas for $ 4.35 million. He said the strength of the single-family market in Las Vegas, which began in the second half of 2020, had expanded into the high-rise market – part of it due in part to the lack of single-family home inventory but also due to the dismantling of the COVID-19 pandemic with increased vaccinations.
“I think you have that kind of slingshot,” said Spiegel. “What you saw with traditional living, the sling effect made itself felt in the third and fourth quarters of 2020. There was a time when high-rise sales fell 80 percent. They were damaged by a pandemic. It was dense life. There was this move of flying out of cities, skyscrapers, and densities to places where there wasn’t much density, including the suburbs of Las Vegas. “
Spiegel now said that people’s concerns about the pandemic have subsided, they still live in Las Vegas and want that high-rise lifestyle again. People change their perception of density.
“They also have a shortage of single-family home inventory, which forces people to think about condominium living when they might not otherwise,” Spiegel said. “It’s a flight to Vegas and the lack of inventory on the single family home side and review of a product category that was completely ditched due to density in 2020 due to COVID. I think people feel good when they are together again. We’re not completely out of the woods, but people feel like they go out to restaurants and open shows and all these different things we haven’t done in a year we’re starting now – even in an elevator with someone. “
Forrest Barbee, a realtor at Berkshire Hathaway Home Services who tracks the five-story high-rise market across the valley, said the first four months of 2021 were phenomenal with 396 closings. That’s an increase from 194 in the first four months of 2020, which isn’t unexpected given the Las Vegas closure in mid-March. But what is surprising is that it blows away the 228 sales in the first four months of 2019, 195 in the first four months of 2018, and 291 in the first four months of 2017. It is one of the best condominium sales ever with 970 closings of mostly existing units in the multiple listing service, Barbee said.
$ 1 million luxury sales also stood out in the first four months of 2021, Barbee said. There were 36 such sales that year, compared to 15 in 2020, 21 in 2019, 24 in 2018, and 21 in 2017.
“I think you can explain that by people moving out of California,” said Spiegel. “You have a flight from San Francisco and a flight from New York, Chicago, and markets like that are more geared towards a high-rise product. It’s also a flight to a more tax-friendly environment. It’s always been like this, but people who own condominiums are generally not major residents other than One Queensridge and Park Towers. There is a lot of impermanence in the housing market. It’s an easy way to build a domicile without the burden of a house. “
Kamran Zand, Agent and Founder of Luxury Estates International, posted a record price per square foot for a condo in the history of Las Vegas at The Cosmopolitan at The Cosmopolitan in the first quarter of this year. He said low interest rates and access to capital with confidence in Las Vegas are boosting condominium sales.
“The first quarter was great,” said Zand. “No new buildings are being built and buyers have limited choices. It’s trust, the vaccine, and the people recovering from COVID as things like restaurants and sports venues open up. People are less afraid of it and agree to find themselves in dense life situations now. “
Randy Char, agent and president of Char Luxury Real Estate, was responsible for the # 3 sale for the first four months on a $ 3.8 million sale on One Queensridge Place. He said skyscrapers are typically a discretionary purchase, and the pandemic gave it a kibosh. Wealthy customers protected themselves and their investments, but now that they are vaccinated, the economy is recovering and the stock market stays strong, they are coming to town, he said.
“We saw more sales at One Queensridge Place (11 sales) in the first four months of this year than we saw 10 in all of 2020,” said Char. “People are moving out of California with high tax brackets and they don’t necessarily want another house.”
Char echoed The Mirror, saying that given the lack of single-family home inventory and soaring property prices, high-rise buildings would be more of a value and opportunity if they hadn’t even looked at them six months ago. There were six sales at One Queensridge in April alone, he said.
“It tells you people are coming out of the pandemic, they’re coming to Vegas,” said Char. “It’s not just One Queensridge. There are many high-rise buildings. It’s still not selling as fast as single family homes, but over the past 30 to 60 days it has been faster than a relative surge in business. It’s a way of life. When the Raiders come back (with fans at Allegiant Stadium now admitted for the first time) and the entertainment comes back, you’ll get a natural boost trying to get high-rise buildings. You’ll want to come to the strip and have a look around. “
The average price of condos sold in the first quarter of 2021 was $ 541,150 and $ 405 per square foot, respectively.
That’s nearly $ 548,166 in 2020 and $ 395 per square foot over 12 months.
These are higher than the price drop in 2019 when the average unit sold was $ 497,127, or $ 396 per square foot. Prior to that, pricing was strong in 2018 when the average close was $ 583,008, or $ 446 per square foot.
“Pricing is a function of supply and demand, and as demand subsided, pricing declined,” said Spiegel. “There is a testament to variables in the market that have never existed before. There is a confluence of topics that come to a head and tell the story of an underrated and historically undervalued product category. The only skyscraper in the city that had significant values is the Waldorf Astoria, formerly Mandarin Oriental.
“In every other luxury building in Park Towers and One Queensridge, none of these buildings had meaningful value. When people thought of Las Vegas as a place to live, they never thought of living in a skyscraper. That has now changed. “
It was the usual suspects at the top of the sales list spearheaded by Panorama and its three towers, with 32 in the first quarter beating the 20 in the first three months of 2020.
There were 25 sales at Turnberry Place, up from 24 in 2020. MGM Signature, a condominium hotel that also houses people, had 24 sales, up from 17 a year ago.
The surprise on the list in fourth place was Trump International with its 20 sales, 16 more than in the first quarter of 2020. There were 25 sales in each of the 12 months of 2020 and 2019. Trump was ranked 12th in 2020 and 10th for 2020 overall in the first quarter.
Spiegel said that with a condo hotel product, most people buy a hotel unit and put it in the room’s pool instead of choosing to live there. Palms Place posted 13 sales in the first quarter, one more than in 2020 as the Palms it is attached to remain closed. Vdara, the apartment hotel in the CityCenter, achieved 10 sales, four more than in 2020.
“It could be an escape to a tax-friendly state,” said Spiegel about Trump’s increase in sales. “People don’t usually live in these hotel rooms. Someone really moving to Las Vegas would go for a traditional product, whether it be a house or a condo, rather than live (in the Trump). They are used as an investment vehicle or as a flight to get your Las Vegas residence up and running as quickly as possible. This is usually the cheapest and most affordable way to do this. “
The average price of Trump International units sold in the first quarter was $ 218,375, or $ 363 per square foot. In 2020, the average price was $ 387,155, or $ 511 per square foot. It was similar prices in 2019.
Char speculated that the increase in sales compared to MGM Signature Palms Place and Vdara Condo Hotels may in some way be tied to political and branding handicaps as President Donald Trump is no longer in office and unit owners may realize that his brand’s worth after that, losing a presidential election and being charged a second time is affected. These sellers appeared to have lowered the prices they were looking for for sales. This is in contrast to a surge in Trump International sales after announcing his presidency in 2015, Char said.
“There are buyers who don’t rate it from a political point of view,” said Char. “When you talk about $ 200,000 for a nice hotel room, that’s pretty good value.”
Among other things, high-rise sales in the first quarters:
■ Veer, 11, compared to seven in 2020.
■ Waldorf Astoria, 10, compared to three in 2020.
■ One Las Vegas, 10, compared to 14 in 2020.
■ Allure, 10, compared to five in 2020.
■ Sky Las Vegas, nine, compared to six in 202.
■ One Queensridge Place, five compared to four in 2020.