LAS VEGAS = SUPER HOT SPOT FOR GLOBAL BUYERS
Las Vegas-Paradise, Nev.
| Total population (2010): | 1,951,269 |
| % of all homes sold that were purchased by buyers with a foreign mailing address in the public record (May '11 - Jan. '12) | 2.8% |
| Median sales price for existing, single-family homes (Q4 '11): | $121,800 |
| Median sales price % change (Q4 '10-Q4 '11): | -9.2% |
| Median sales price for condominiums/co-ops (Q4 '11): | $55,900 |
| Median sales price % change (Q4 '10-Q4 '11): | -7.9% |
| Top 3 countries of origin for foreign buyers: | Canada, Australia, Israel |
| % of people who moved in the past year who were foreign-born and moved from abroad (2010) | 2% |
| Walk Score: | 53 |
"Las Vegas is on sale and the world is buying," said Heidi Kasama, vice president of the Greater Las Vegas Association of Realtors and managing broker at Prudential Americana in Summerlin, Nev.
Real estate research and information firm DataQuick noted that about 2.8 percent of buyers in that market area listed a non-U.S. home address, which is the lowest level among the 10 markets in this report but still more than double the national rate of 1.1 percent.
Las Vegas is also one of the most searched cities by non-U.S. site visitors to real estate search sites Juwai.com, Realtor.com, Point2Homes.com and Trulia.com.
Foreclosure data provider RealtyTrac listed the Las Vegas metro as the nation’s foreclosure capital for 22 straight months through September 2011, and nearly three out of five sales in the Las Vegas market in the fourth quarter were in some stage of foreclosure.
One in 60 units in the Las Vegas area had received a foreclosure filing as of fourth-quarter 2011 -- the highest foreclosure activity rate among the 10 markets featured in this report and the fifth-highest in the U.S. overall.
As of December 2011, Las Vegas home prices had declined 61.4 percent from their peak, according to the Standard &Poor's/Case-Shiller Home Price Indices.
"Most foreign investors are buying investment homes to rent out, but some are buying nicer homes to rent out now that they plan to retire to in the future, or have as second homes they can visit more," Kasama said.
Most buy homes under $200,000 that typically rent for between $1,200 and $1,600 a month, she added.
The median sales price for an existing single-family home declined 9.2 percent year over year in the Las Vegas area, to $121,800 in the fourth quarter, compared with $163,500 at the national level.
Meanwhile, the median sales price for condos and co-ops in the area dropped nearly 8 percent, to $55,900 -- the lowest median sales price among the 10 markets.
"Values have dipped well below replacement cost, which many believe provides an opportunity for future upside. With a median resale closing price of $100,000 in January 2012, values equate to about one-half the median new-home price ($212,000)," said Brian Gordon, principal at Las Vegas-based business advisory firm Applied Analysis.
"While the mix of properties sold may impact these figures, there is clearly a disconnect between resale home closings, a majority of which are distressed sales, and new-home construction pricing."
Historically, he said, resale prices have trended at about 80 to 90 percent of new-home prices.
"In our business, we have seen a number of Chinese and other prospective investors consider acquisitions in the marketplace. We expect this trend to continue as prices remain relatively depressed," Gordon added.
Don Meier, a doctor who resides in Alberta, Canada, began buying real estate in Las Vegas in November 2009. Thus far, he has bought five houses and four condos, all in cash. His most recent purchase was last summer, around August 2011.
A manageable commute (two hours and 45 minutes by plane) and low prices convinced him to buy in Las Vegas.
"Where I'm from, the housing prices are about three times what they are down there," Meier said from his office in Alberta.
Meier decided to form a Canadian corporation to buy his properties.
"I think it's easier from the tax perspective and from the perspective of doing business for purely real estate rental income," he said.
"And a corporation is easier to pass on than are individual, privately owned houses. If you're going to leave property to your heirs in a foreign country, they inherit the company and the properties that belong to the company, and they just become shareholders and things carry on as they (had) before."
He hired lawyers, both in the U.S. and Canada, as well as a real estate agent in the Las Vegas area.
"(The Las Vegas real estate agent) helped me with absolutely everything from his end: escrow, finding vendors to do improvements on the homes that I bought," and also recommended a property manager, Meier said.
He currently rents out eight of his Las Vegas properties. He's using one, a luxury high-rise condo in a residential tower, The Martin, as his home base in the area, but eventually plans to rent that one out, too.
More than 70 percent of the area's buyers who used a foreign address in their purchases from May 2011 and to 2012 were from Canada, according to DataQuick.
About one-fifth of the area’s population 1 or older was foreign-born in 2010 -- the third-highest share among the 10 markets featured in this report.
Foreign buyers accounted for 6.2 percent of resale condo purchases in DataQuick's analysis, compared with 2.1 percent of existing, single-family home purchases and 1.6 percent of new-home purchases.
Paying in cash
International buyers generally pay in cash because obtaining U.S. financing is "pretty much impossible," Kasama said.
Gordon Scott, a real estate investor from Scotland, said he didn't even consider financing when he bought his first property in Las Vegas because he wasn't a U.S. citizen.
"It's very hard for foreign investors to borrow money. I can't understand why. It would stimulate the economy," he said.
| Las Vegas-Paradise, Nev. | Metro | U.S. |
|---|---|---|
| % homes sold purchased by buyers with non-U.S. mailing address (May '11-Jan. '12) | 2.8% | 1.1% |
| Clark County | ||
| New homes | 1.6% | |
| Resale condos | 6.2% | |
| Resale houses | 2.1% | |
| Median sales price for existing, single-family homes (Q4 2011) | $121,800 | $163,500 |
| Median sales price % change (Q4 '10-Q4 '11) | -9.2% | -4.2% |
| Median sales price for condominiums/co-ops (Q4 '11) | $55,900 | $160,800 |
| Median sales price % change (Q4 '10-Q4 '11) | -7.9% | -1.7% |
| Population (2010) | 1,951,269 | |
| % of people who moved in the past year who were foreign-born and moved from abroad (2010) | 2% | 2.3% |
| % population age 1 or above that is foreign-born (2010) | 22% | 13.1% |
| % foreclosure sales (Q4 '11) | 58.7% | 23.7% |
| Foreclosure activity rate (Q4 '11) | 1 in 60 units | 1 in 222 units |
| Vacancy rate (2010) | 16.9% | 13.1% |
| Top 3 countries of origin for foreign buyers (May '11-Jan. '12) | % of all foreign buyers in metro | |
| Canada | 73% | |
| Australia | 7.9% | |
| Israel | 3.7% | |
| Other | 15.4% |
