Hi-Rise Condominium Appraisals

As a broker and an appraiser in Las Vegas for several years I have seen the dramatic changes brought about by the development of thousands of condo units in several hi-rise buildings just as "the sky is falling" mentality of the recession took hold.  While the real estate market hasn't significantly improved since 2008, the hi-rise or "vertical" market has seen some positive results in some buildings.

While appraisers usually look to the overall Las Vegas condominium market and comment negatively on the steadily lower sales volume, Increasing number of listings and falling condo prices, which are all well documented factors, some exceptional vertical projects have seen steady or increasing demand and relatively stable prices.  Why are some buildings doing better than others?  I'm sure that the management firms within the buildings doing well would argue that it all had to do with their efforts, but it is my opinion that there are several factors at work.

Importantly the buildings doing the best have, of course, great locations close to newly constructed Strip projects.  Also important however is their high quality interior finish, their service "amenities" and their homeowner association (HOA) fees.  What few luxury condo buyers in Las Vegas realize is that the HOA fees associated with a 1,000 square foot condo in Las Vegas run between about $ 400 per month and $ 800 per month.

The most popular buildings pay all of your utilities, concierge services and cable TV out of the monthly HOA fee and when they do, that payment effectively reduces your out-of-pocket costs.  When buyers make comparisons a unit with a $ 500 per month HOA with only concierge service included is a negative factor when compared to a building with a $ 500 per month HOA that pays for all utilities, it's a no brainer.

Another factor that is often not discussed is the preference of Asian buyers or buyers from other foreign markets.  When a Las Vegas building is being favored by a certain country or group that preference / popularity factor can have a very positive influence on sales.

As an appraiser it's important to realize that hi-rise condo demand and value have to do with a number of supply and demand factors, that there are some buildings that are exceptional in the market, and that some buildings can have "strong" demand even when the overall market is languishing.

As noted in other articles, there is a difference between condominiums and condo-hotels and valuing a hi-rise condo in one building type or the other can make a great deal of difference.

2013 Update: The condo / condo-hotel market now consists of over 13,600 units in Las Vegas and nearly 35% are still developer owned, some 300+ unit buildings are still nearly 90% developer owned!  Importantly each building must be evaluated individually since supply and demand factors vary considerably between one building and another.    

For more residential or commercial appraisal information contact Glenn Rigdon, MA,MRICS, ASA a Las Vegas / Henderson Nevada appraiser via email or via his business website Horizon Village Appraisal (http://www.horizonvillageappraisal.com), or you can also click on “Contact Us” on the home page of this website.

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