[ToolAcademy]

I've been reading here for a long time, since before I moved to Las Vegas last year. I've learned a lot reading these threads, now I finally have something to share. I find the downtown condo market very interesting as a bellwether, mainly because it is easier to compare exactly identical units than to houses which have far more variation. Even across buildings, these condos are pretty similar to each other. I also happen to think living in Downtown LV might be pretty cool, call me crazy but Summerlin seems like a snoozefest.

Yesterday, Sat, Aug 29, Newport Lofts held an auction for some never-sold condos. I wanted to see what was up... I did not register as a bidder (I'm happily renting) but did observe and track all the sales. So if anyone is interested, this is the up-to-the-minute state of downtown condos:

price unit sqft $/sqft maint
$485,000 2109 3,052 $159 $913
$365,000 2110 2,435 $150 $913
$332,000 2107 2,536 $131 $913
$310,000* 2111 2,391 $130 $913
$310,000* 2105 2,015 $154 $913

$250,000 1503 1,612 $155 $570
$240,000 1806 1,654 $145 $570
$236,000 1606 1,654 $143 $570
$227,000 1506 1,654 $137 $570
$210,000 1403 1,612 $130 $570
$210,000* 1809 1,644 $128 $570
$206,000 2013 1,556 $132 $570
$210,000 1709 1,644 $128 $570
$200,000 1203 1,612 $124 $570
$200,000* 1206 1,654 $121 $570
$200,000* 1106 1,654 $121 $570
$200,000* 1006 1,654 $121 $570
$189,500 1609 1,644 $115 $570
$200,000* 903 1,612 $124 $570

$154,000 1704 1,052 $146 $467
$135,000 1508 1,073 $126 $467
$125,000 1612 1,062 $118 $467
$125,000 1512 1,062 $118 $467

$104,000 2002 912 $114 $467
$104,000* 2001 912 $114 $467
$105,000 1902 912 $115 $467
$107,000 1702 912 $117 $467
$101,000 1101 912 $111 $467

(prices with * were purchased uncontested after the previous unit closed)

At least 25 more available units did not sell (all units had a fixed, public reserve price, also some units were pulled off the board).

Yes, those maintenance fees are monthly. That's what is killing these condos more than anything, in my opinion. Some prices are low enough to be considered good deals, but the HOA makes it unreasonable. What are they spending all the money on? Pool maintenance? Security? Groundskeeping? Every HOA and apartment community has these. OK, so they have a concierge. Is that really necessary or effective? I mean is the concierge from a mostly-empty condo building going to have any extra pull in getting you a dinner reservation or table at a nightclub?

Some interesting observations:

-One of the $200k buyers immediately announced that his unit was for rent. Only 5% down was required so a $190k loan at 5% is slightly over $1000/mo + $570 HOA + $340 prop tax = over $1900/mo nut. It's a 2br/2br unit but I just don't see him getting that in rent. The few advertised rents in this building on Craigslist are lower, and they can only drop if a bunch of today's sales will soon be competing for renters. And he's out the $10k down payment.

-You can definitely toss out the "cool" marketing material so prevalent among all of these condos. If you think your neighbors are going to be a bunch of young, hip, cosmopolitan people all chilling out at the pool, forget that! Go to the Palms instead. Today's buyers were an interesting mix, I guess I'd just say I don't expect to run into many of them at the Downtown Cocktail Room or the new Firefly. Maybe playing penny slots at the Four Queens.

-The simple existence of this auction will lead to more foreclosures among the existing owners. Take a look at the prices people paid at Blockshopper. Why would you continue paying on a $400,000+ mortgage when the guy in the identical apartment above you just paid half that? Just default on your unit and buy a new one, you might end up with a better view in the process.

[ToolAcademy]

I'm hoping that this thread can be maintained and updated when future auctions occur. I only went to this because I happened to see an ad in the RJ a few days before. Otherwise I wouldn't have known about it. I know Allure condos had an auction a few months earlier, I would have liked to see the results of that.

Going forward, I hope we can publicize the existence of these auctions and people will volunteer to attend and post results. Consider it an "open source" project. The whole thing took only 2.5 hours and to be honest, it was kind of amusing. Not the best way to spend a beautiful Saturday but it really wasn't bad and hey, it was educational.

One of these days, these buildings will be an attractive purchase. I don't think we're quite there yet, but at least it's not completely outrageous like $300-500 per sq ft. I also wonder if the other condos will adjust any of their pricing after hearing these results (I assume someone from Soho, Juhl, etc sent someone to monitor the situation).

[skisickie]

I was in town and saw the ad but didn't want to bother because of fees. They need to cut the fees before I would move on any of them.

[Wade C]

I want to thank you ever so much for this information. I have been reading this board for months. I live in the Philippines. I have been thinking of a condo in Vegas but did not want just to move without as much information as I could get. The one thing that I have had trouble finding information about are the HOA. I have never had to pay that in my life. I am retired USN and just have never lived anywhere I had to pay a HOA. Well the information you gave me settles it. I will stay put in the Philippines. Thanks ever so much for more information in one post than i was able to find out in months of reading. thanks thanks thanks

[airics]

betcha most of those were shill bids, they will be back for sale soon

[Eyes]

Does the HOA include all utilities ?

[airics]

hoa's usually don't include utilities

[Pauline May]

Tool Academy:
I echo the sentiment of gratitude for you taking the time to compile this information and post it. As a buyer -- not investor -- who has been looking since April, I see a similar situation with the SF home market with distressed properties. My husband and I have looked at numerous distressed properties, short sales and REOs, etc., and are finding that the amount of cash outlay it takes to get these properties to habitable condition is a huge detriment when justifying paying some of these prices.

We're in a good position, not in a hurry and have cash stockpile and good credit access, but this is almost to the point of ridiculous. We're amazed at the bad investment decisions that seem to abound in these feeding frenzies.

[Swigchow]

I wonder how much lower it can go? Its pretty close to 100$/sqft. The REO's are in multiple bid situations. The corner units (#03, 06, 09, 13) seems the most popular.

[olecapt]

It will be interesting to see how much of the listed stuff turns out to be real. We will see these in the data base if they actually change hands within a month or so. A number of these have changed greatly between the auction and recording.

I will check the ones listed in a couple of weeks and in a month or so and see what really happens.

Note that these places cost close to $300 per SF to build. I still have my old projection that a realistic price of some of these units may be zero.