This is my third visit to Las Vegas since the housing meltdown begin. Our first trip was a little less than two years ago, as we were attracted by falling home prices and the possibility of eventually setting up retirement residence in Las Vegas. A local real estate broker graciously spent over four hours chauffeuring us around various neighborhoods west of the strip to show off bank owned properties. Prices were tantalizingly low, predominantly $120 to $150 a square foot, including brand new construction. At that time I was advised by a local resident to hold off because prices would eventually fall to $100 a square foot. The main impression made on this trip was how much new and recent residential construction there had been in Las Vegas since 2000.
Six months later we came back, this time riding the foreclosure bus tour over an even wider geographic area. If the first trip were an eye opener, this trip was a shock. The magnitude of residential construction was incredible--the number of newly built neighborhoods was beyond imagination, stretching perhaps 20 miles north of town. Certainly nobody who worked on the Strip would contemplate living this far away. Prices out here approached $80 a square foot, while closer in properties fetched $100 a square foot, amazing considering current construction costs of $90 to $100 per square foot.
In the year since the foreclosure bus tour I've seen that prices have dropped further, though they're starting to stabilize. Unfortunately for many property owners, the stabilization point appears to be as low as $60 per square foot in the most extreme cases. And my revelation as to how much inventory had been built continued. Driving around the M Resort Casino, way to the south of the strip, an entire sea of recent construction, this time predominantly condominiums, appeared before us. The quantity of recently built housing we've seen in the past couple of years is overwhelming--and we haven't even set foot in Henderson. I've heard people say that it will take Las Vegas 10 or more years to absorb all of this construction. I believe it.