Unexpected Growth in High End Real Estate Market
There seems to be a new level of confidence in the economy of Las Vegas for the ultra wealthy. This is seen through the increase sale of new high-end homes and the development of a new luxury community, The Summit Club, which has sold about half of its lots. This is a good sign, but it is not the sum total of the high end real estate market.
High Values and High Confidence
The 555-acre country club community recently announced that customers are currently in the process of closing on 72 of 140 lots that are for sale. If you consider that the total value is $235 million, this is an average of $3.2 million for lots that range in prices from $2 million up to $10 million.
All of this is in addition to the closings on 50 new homes valued at $1 million or more in 2015. This was the largest number since 2008. Between 2011 and 2014, there were only 13 combined sales of new homes valued at $1 million or more.
“With our private banking division, over two-thirds of what we’ve been doing is related to residential real estate,” said Randy Boesch, executive vice president of The Private Bank, a segment of Nevada State Bank that works with high net worth and high-income clients. “We’re seeing more of our clients going out and buying high-end lots and getting construction financing and building on these high-end lots and developments in Summerlin and Henderson.”
The investment these buyers are making in the lots is not cheap, but it is not the only money they are spending. Custom homes are expected to cost somewhere in the $10 to $20 million dollar range. Club membership will be $150,000 and the dues are $27,000 a year. HOA fees will be $13,027 a year. All of this is money that is being spent due to the increase confidence in the local economy.
Most of the lot buyers (85 percent) are from Southern Nevada and most are business owners. The majority of the other 15 percent are from Arizona and California. Broker/owner of Realty Executives of Nevada, Fafie Moore, said, “One of the good trends in looking at the local economy is the success of the Summit project. When this started a year ago, people thought it would be bought by out-of-state buyers with high net worth. There’s a lot of confidence in this project with our high net worth people. I see that as very positive. They have confidence in business going forward.”
Construction on these lots is expected to begin this fall and driving the interest in the community is the fact that it will be the only private club community in Las Vegas for those who live there and it will not allow non-residents to join. It will have a spa, restaurants, a fitness center, a kid’s camp, tennis courts, and other amenities to make it much like living in an upscale resort on-site.
While the market is not where it was before the recession, it is showing signs of becoming better. The higher-end market is really seeing great signs. It will take some time for the market to get back to the peak level that it was before the recession, but all signs point to it heading in the right direction.