LAS VEGAS, NV - The condo craze exploded in the Las Vegas valley just a few years back, but now with the foreclosure crises, people aren't buying into condos when housing prices are so low. It leaves condos floundering with too much inventory. When you look at big condo projects like Loft 5, it probably does not occur to you that there is any option other than to buy. But with the condo sales market at a standstill, some big developers are shifting strategy and going after renters.
Leasing agent Michelle Cadiz says the condo upgrades are impressive to would-be renters, "They actually love charcoal. Charcoal is very marketable. They are just surprised that everything is just really contemporary." Loft 5 may be on the early edge of a growing trend, to rent until the economy improves.
"Developers have excess inventory, they need to do something with it, and how do they survive or what do they do between today and whenever things improve? And certainly one of the alternatives is to rent them out," said David Krantz with RMI Management.
Krantz's company has been retained by the Loft 5 developer to lease about 200 units. Krantz says for some would-be renters, it is a unique opportunity, "Maybe be able to test drive a product that maybe they are not sure of. Something they might not ordinarily try but they get a chance to live here, see what it like. What is mid-rise living like? What is loft living like?"
So how did we get here? "Relatively speaking, the luxury condo market is a fairly new animal to the Las Vegas valley," said Rachel Skidmore with Applied Analysis.
Skidmore says it is a simple case of oversupply, "As we saw a few of these initial products come on line, demand was extremely great. A lot of these developers saw that and jumped on that wave." But it is a development wave that ultimately crashed. Applied Analysis says it has tracked 107,000 announced condominium units over the past five years, of which only about 15-percent have become reality.
As for the unit at Loft 5, the rent works out to $1,650 a month when you factor in a one free month promotion. Leasing agents say it is comparable to renting a single family home which would include the same amenities offered here such a pool and workout room.
Source: LasVegasNow.com