Usually when you hear the word foreclosure on the news, its referring to the plight of home owners across the country. Last Sunday 60 minutes did a piece on the foreclosure capital of the United States, Stockton California. However, that is only half of the foreclosure story. Its not only home owners that are in trouble. Some developers are in the same boat.
There are a few major projects around the Las Vegas valley that have gone into foreclosure. The biggest development to have trouble was Lake Las Vegas. Last fall the developer defaulted on a $540 million dollar loan after they failed to make option payments on 400 acres of land. The developer Transcontinental Properties, ended up selling assets (including shops and restaurants in Montelago Village, the aforementioned acreage and four golf courses) to a group of creditors.
The loft market was not without its own casualties. Newport Lofts which was completed last year has been taken over by the mezzanine lender. Newport Lofts sold roughly 100 of the 168 lofts for sale before the sales slump (proceeds went to the first lender). Residents have moved into the project, and the first floor of retail has its first tenant. No official word yet on the remaining units.
What does this mean for buyers in these areas? Well, for bargain hunters in the loft market, for the first time in the market's history, there is a wide range of standing inventory of available lofts for sale, (which also includes high rise condos). Investors that bought in the boom times may be anxious to recoup their deposits back and potential buyers may be able to find some deals. I've been contacted by a few investors about units they purchased and are looking to liquidate. As for Lake Las Vegas homes, prices are remaining fairly steady. Some projects are having closeouts so there are deals to be had, but being a resort destination it's a fairly safe bet that prices won't dip.