Luxury homes in Las Vegas’s suburban neighborhoods have been selling quickly but prices are still at 2008 levels. Ken Wolt spent $1 million on his home, while the Alfonsos home cost $2 million. Photo: Lisa Corson for The Wall Street Journal.
In Las Vegas these days, the high-rollers may be the ones saving the most cash.
a real-estate investor representing an investment company, recently paid $2.8 million at auction for a 5-acre gated estate with seven bedrooms, a lagoon-style pool and a car museum in Tomiyasu Estates, about 10 minutes from the Strip. The estate last sold for $4 million in 2010. “The timing was right,” says Mr. Shelton, who also snapped up another investment, a 17,000-square-foot equestrian estate on 11 acres in the Paradise Enterprise neighborhood for $1.25 million. The seller paid $3.75 million for that property a year ago.
At the high end of the Vegas housing market, homes are going fast. Sales of homes priced over $1 million almost doubled to 342 in 2013, compared with a year earlier, according to the Greater Las Vegas Association of Realtors. But while overall home prices in Las Vegas have risen over the past year, prices in the luxury slice of the market have struggled. The median price for homes over $1 million was virtually unchanged last year from the same level it has hovered at for the past five years—around $1.4 million. The result: Buyers from pricier metro areas, like Los Angeles, are finding some steep discounts on luxury homes.
a Grammy-nominated record producer and the founder of Dim Mak Records, bought a four-bedroom home in Summerlin, a gated golf-course community northwest of the city. At 15,600 square feet, the house is big enough for a music studio and a gym that has pits filled with giant foam cubes. The price: $2.8 million, $200,000 off the listing price. “The value was just insane,” says Mr. Aoki, who is moving from a 3,000-square-foot home in Los Angeles.
The relative discounts at the high end are a contrast to the overall Las Vegas housing market, which has been bouncing back after a steep decline. Last year, Vegas home prices were up 35.5% over the previous year—more than in any of the other 20 cities tracked by the Standard & Poor’s/Case-Shiller price index. Much of the gain occurred because many foreclosures finally started selling. In 2013 some 62% of home sales were “traditional sales”—not foreclosures or short sales—compared with just 37% in 2012.
During the darkest days of the Las Vegas housing bust, most luxury homeowners sat on their homes, waiting for the market to improve. Now, real-estate agents say, they are returning to the market en masse, sensing a window of opportunity. And many are looking to sell quickly, having been spooked by the last downturn—which means they are willing to negotiate on price.
“The higher-end homes have lagged in appreciation and people feel the timing may now be right to sell,” says
of Synergy Sotheby’s International Realty, who organized the auction where Mr. Shelton picked up his homes. At that same auction, a 3,905-square-foot, three-bedroom penthouse in The Palms Place Resort next to the Strip sold for $1.8 million to Texas banker
It was listed for $2.2 million. The seller was an investor named
a Texas businessman.
Many of the biggest deals are in fairly new, upscale gated communities in the city’s suburbs. These developments, which feature amenities such as golf courses, country clubs, parks and shops, were largely built during Las Vegas’s superheated run-up in the mid-2000s. Some homeowners who bought in these developments—which became emblems of the market’s boom and subsequent bust—are now eager to sell.
luxury-home builders, bought their lot for $800,000 in 2006 and built an 8,000-square-foot, four-bedroom, 5½-bath custom house on almost half an acre in the Ridges in Summerlin, a gated country-club development. When the market tanked, and similar lots in the same neighborhood were selling for half what they paid, they decided to stay in the house because they had too much money in it.
Even when they got a lot of lowball offers, they didn’t sell. When the market started to improve last year, they decided to list it for $3.4 million—and sold it for $3 million to
head of Global Marketing Partnerships at Ultimate Fighting Championship, a mixed-martial-arts promotion company. Though they said it meant a loss for them—they won’t say how much—the couple said they decided to sell to Mr. Mossholder because they liked him and they were concerned that homes built more cheaply in their neighborhood during the downturn might erode the value of their home further if they waited.
‘The value was just insane,’ says Steve Aoki, who bought a four-bedroom home in a gated golf-course community northwest of the city.
Mr. Mossholder, who had been renting, had been looking for a new house for three years. “I wanted to be in this development, but people weren’t selling” he says.
Many of the new luxury buyers in town hail from the same place: California. “Half my buyers last year came from California,” says
with LUXE Estates Collection. Last year 13.8% of all homes sold for $1 million or more in the Las Vegas area went to buyers from California. New York, in second place for out-of-state buyers, accounted for 1.4% of all $1-million-plus sales, according to San Diego-based DataQuick.
These buyers are attracted to Vegas’s low prices—and Nevada’s low taxes. Many Californians have arrived in the wake of Proposition 30. Passed at the end of 2012, the measure hiked personal income and sales taxes.
Last spring, Joann and
sold the home they’d owned in Palm Springs, Calif., for over two decades and moved to Las Vegas, purchasing an 8,500-square-foot, almost-new Mediterranean-style home in a guarded, gated country club community for $2 million. The “state of California is taxed to the limits and its economy isn’t in good standing,” says Ms. Alfonso.
The couple, who also later sold their home in Portland, Ore., “couldn’t believe how much house” they were getting, adds Ms. Alfonso, who estimates a similar home in a similar neighborhood in Palm Springs would have cost three times as much.
the move to Las Vegas was more about lifestyle than tax relief. The former head of a radiobroadcast group who acts in commercials and theater and does voice-overs, he was tired of the stress of Los Angeles (traffic, bad roads) and wanted a house big enough for a recording studio. He bought a partially finished, 6,500-square-foot house plus a guesthouse in 2010 for $1 million in a gated community and put about $200,000 into renovations. At first he was worried he’d miss the culture in Los Angeles, but he says he has found plenty of entertainment in Las Vegas.
Over the past five years, Las Vegas has started to more closely resemble Southern California. There are now more suburban gated communities with upscale shops. The once-grungy downtown is being revitalized. “Ten years ago people thought of Vegas as the Strip. Now a lot of people don’t go to the Strip anymore,” says
of real-estate firm Shapiro & Sher Group.
Even celebrities are trading up: Last May, musician
bought a house for $6 million in Summerlin. Last month, he sold his 7,200-square-foot contemporary down the street for $2.9 million. He had bought it in 2011 for $3.5 million. His new pad is 7,800 square feet and, according to the listing, has a $400,000 state-of-the-art movie theater, a game room, a gym, a putting green and an infinity pool.
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