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Nov. 29, 2007
Copyright © Las Vegas Review-Journal

Panel sees reason for optimism about Las Vegas

Apartment property called 'a good hold'

By HUBBLE SMITH
REVIEW-JOURNAL

Plagued by low-paying jobs that haven't kept pace with median home prices and declining quality-of-life issues, Las Vegas still presents its share of opportunities, a panel of community business leaders said Wednesday.

"I think there's excellent opportunity in the apartment market," Dennis Smith, president of Las Vegas-based Home Builders Research, said at Colliers International Fall Trends. "Any apartment property is a good hold. The challenge is getting through this housing recession. I don't think there's any business associated with housing that isn't off 40 percent in revenue."

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    • Las Vegas gets knocked for its lack of cultural arts, its reputation as "Sin City" and university system that lacks the credibility of more established cities around the nation, the panelists agreed.

    Yet it's still a place some 6,000 people are moving to each month, where job growth remains above the national average, where a lot of people have made a lot of money.

    Developer Mark Fine said Las Vegas didn't have a "sense of community" when he moved here more than 30 years ago, but the people who live here love the way the city has evolved.

    "You'd tell your wife you're moving to Las Vegas and she'd say, 'You're moving to Las Vegas alone,' " he said.

    Fine said he's been hearing about economic diversification for 30 years. Being a market-driven economy has helped Las Vegas remain relatively stable and avoid some of the pitfalls of more diversified cities, he said.

    "The truth is that any diversification is a spinoff of the gaming industry," he said.

    Christopher LoBello, vice president of investment for Colliers International, said Las Vegas is maturing as a city and we can expect to see higher density with three- and four-story apartments and condos. He said the challenges are land availability and prices, which affects housing affordability.

    "What about the affordability issue?" Smith said. "Where are all these people going to live? That's easy. They're going to be renters."

    Smith said home builders had no choice but to adjust to a declining market. They're building about 15,000 homes this year, compared with 30,000 in 2006. The basis of what they're going to do in the future is still there, but the numbers and profitability have changed, he said.

    "The housing market is reshaping itself," Smith said. "We had all the major public builders in Vegas. They're primarily concerned with numbers. Some of them have resigned that instead of selling 2,000 homes a year, they're going to sell 500."

    Builders are a resilient group and will build whatever residential product people want, he said.

    "The names may change, but traditional builders will be here. I get calls all the time from people, smaller builders in other markets, who see opportunity in Las Vegas," Smith said.

    Contact reporter Hubble Smith at hsmith@reviewjournal.com or (702) 383-0491.

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    jerry wayne wrote on November 29, 2007 12:43 PM: And all the construction workers that moved here because of the building boom, will find another in a different part of the country.

    It's all cyclical.


    jerrywayne wrote on November 29, 2007 12:41 PM: According to the Center for Business and Economic research Clark County had 5,196 new residents in October.

    Everybody is complaining because people that never should have been given a mortgage got one. I'm in a good position to buy a house now. If the market wasn't experiencing this decline, I wouldn't be able to purchase a home for another 5 years.


    David Huntington wrote on November 29, 2007 12:08 PM: "What about the affordability issue?" Smith said. "Where are all these people going to live? That's easy. They're going to be renters."

    A rather ignorant statement. If housing prices are high, what makes the gentleman think that rents will be cheap? Rents have been going up faster than inflation in Las Vegas. Have wages kept pace?


    Andrea Feodorov wrote on November 29, 2007 11:24 AM: This is more of the same rose-colored drivel we've come to expect from the only paper in town. The Review Journal really needs to change its name to the Polyanna Post (or the Las Vegas Chamber of Commerce News). Even so, you've got to love Dennis Smith's comment that the major builders are "primarily concerned about the numbers." Of course they're concerned with the numbers! Who wouldn't be? Businesses are closing, mortgage money has dried up, and Nevada (Las Vegas) leads the nation in foreclosures. Affordability is rapidly becoming yesterday's problem. Slashing home prices has had little effect on sales. The problem now facing builders is unprecedented inventory levels, tightened lending standards, and a disintegrating mortgage market. The oft-cited argument that Nevada's lack of land will underpin prices may be a consideration in a growth market, but not in a market that's contracting. I also question Mr. Smith's contention that "6,000 people are moving to [Las Vegas] every month." According to state statistics reported by the Review Journal just last month, Las Vegas is losing residents for the first time in ten years. Nice try, Dennis.


    Population wrote on November 29, 2007 09:41 AM: Clark County Comp Planning estimates population for July of each year.

    The most common way of estimating net migration is to subtract the current estimate from the previous estimate and divide by 12.

    Should you like to figure this out for yourself try

    http://www.co.clark.nv.us/comprehensive_planning/05/Demographics.htm


    what? wrote on November 29, 2007 09:28 AM: "Where are all these people going to live? That's easy. They're going to be renters."

    What? Oh yeah, that's real great...not. what is this guy thinking? I'm sure that's everyone's dream. I'm sure they all say "I wish I can rent forever, I don't want to buy a house." Last time I checked the american dream was to OWN a house, not rent. Plus if everyone rents, it can't be great for a neighborhood since renter properties aren't kept up well.


    Danny wrote on November 29, 2007 08:46 AM: old rocker,

    LOL!!


    alan berk wrote on November 29, 2007 08:24 AM: What a bunch of B.S

    We are headed for a recession and this guy thinks everything is hunky dory!
    What about all of those foreclosures!!??

    if the stupid home builders stopped building there would still be 27,000 homes for sale!!! we don`t need any apartments built!

    it will be at least another year before home prices at least stop going down!

    Quality of life- gee if people weren`t commutting and the people of las vegas got smart about living close in this would be terrfic city to live in.


    old rocker wrote on November 29, 2007 08:15 AM: "6000" move in.
    "5800" move out.
    "50" go to jail.
    "10" die.


    roger wrote on November 29, 2007 07:15 AM: Can somebody please tell me where this '6000 per month' number is coming from? I would love to see the analysis that produces this number. We see many reports on the current inventory of homes for sale but do we have any verfication that these people are indeed renters ? And can someone explain why the inventory of homes for sale is not dropping as a result of this constant influx of people? I think it's great that Mr. Smith acknowledges all these people will be renters. Is that what this city wants or needs? More density to the population so that the roads get more crowded with people who don't contribute to the city/state with property taxes? And a higher population of residents with low paying jobs? I have no doubt builders will move their focus onto apartments, because that is where all the money is to be made in the future. But if they were in cahoots with all the other so called real estate profesionals in this city (as some people suggest) why are they not liable for all the losses people are going to incur as a result of the huge discounts they are now offering of their houses?


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