COLUMN: Carmel Hopkins

There's no doubt that the Las Vegas real estate market is hot. Every analyst in the market issues monthly recaps, pointing to the increases in sales and prices.

But, how hot is it, really?

It's easy to see that there is no standing inventory and people are practically duking it out to get ahead in a waiting line for new releases. And, this is true across the board from entry-level to high-end production homes.

But, all is not roses in the luxury market -- those multimillion-dollar custom homes gracing golf courses around the valley -- and that's where the deals might be found, according to information from the Wall Street Journal and Coldwell Banker broker Stan Hicks, who deals with the high-end market in Las Vegas.

The Wall Street Journal Online recently ran a story that shows people selling multimillion-dollar homes are losing money nationwide, with the exception of Los Angeles County, where prices are up 18.48 percent.

The story describes the luxury home market in Fairfield County, Conn., down 9.71 percent; Palm Beach County, Fla., down 6.83 percent; Cook County, Ill., down 3.85 percent; and Denver County, Colo., down 38.24 percent.

Amusingly, the luxury market overview, a survey of 50 markets by Fidelity National Information Solutions, considers homes with more than 4,000 square feet to be in the luxury market. Heck, that would knock out a lot of high-rise and golf-course homes in Las Vegas that have less square footage, yet start at more than $1 million. On the other end, that includes a home in Knox County, Tenn., that sells for $310,000, not much more than the median price of a new home here.

The 2002 Las Vegas Luxury Home Report by Coldwell Banker shows it was a very impressive year and the market remains strong. There were 146 million-dollar homes sold in 2002, compared to 107 in 2001, a 36 percent increase.

However, the median price of these homes fell 8 percent. There were 12 ZIP codes that showed enough sales in the $1 million-plus market to compare. They were: 89011, +4 percent; 89012, +13 percent; 89014, 0 percent; 89052, -2 percent; 89109, -21 percent; 89113, -25 percent; 89117, 0 percent; 89134, -7 percent; 89135, +7 percent; 89141, +3 percent; 89144, +15 percent; 89145, -16 percent.

Hicks attributes the downturn to an artificially high market generated by the Street of Dreams.

"Those homes sell for elaborate prices, averages of $425 per square foot, generating pie-in-the-sky dreams. While in reality, it's not so consistent a market- place. Right now, $300 per square foot on golf courses is a very high range and interior lots are now down to the low $200s per square foot."

Hicks said the high-rise market, particularly, is being used as a second, third or fourth home.

"You have entertainment figures or sports celebrities buying condos so they can come to Las Vegas to party or establish a residence that they can just lock up and leave for weeks at a time."

Hicks believes the city as a whole doesn't have the caliber of jobs to sustain million- dollar homes.

"A lot of people are buying everything as investments."

The Coldwell survey showed the most expensive luxury home sold in 2002 was a 24,000-square-foot estate for $10 million in the 89120 ZIP code (that's in the Wayne Newton area).

Finally, it states, "since the downturn of the stock market, unsure investors are turning to real estate. It is the vibrant Las Vegas economy, some of the lowest interest rates in history, Nevada's tax codes and unease about the stock market that has helped the Las Vegas Valley soar to new levels in the luxury home market."

Carmel Hopkins, real estate product manager for the Las Vegas Review-Journal and Las Vegas Sun, can be reached at 380-4574. Her e-mail address is chopkins@ reviewjournal.com. Snail mail is P.O. Box 70, Las Vegas, NV 89125.

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