Luxury for Less

Million-dollar homes starting to move due to rare high-end short sales

Half-off sales are normally limited to deals such as skiing equipment in June and electronics store liquidations. But now in Las Vegas, savvy buyers are shopping clearance racks for luxury homes with burnished stained-glass windows and master suites that pour out onto cozy esplanades, listed at about half their original value.

Sales on homes in the million-dollar price range are increasing, according to Las Vegas-based Home Builders Research. New home sales in that category have tripled compared with this time last year, and resales have risen 28 percent. Contrast that with a 13 percent decrease in the overall number of homes purchased in the Valley compared to the early part of 2009.

Experts attribute the increase in pricey home purchases to the basic premise of shopping: The greater the discount, the greater the likelihood someone will buy it. These luxury homebuyers are striking gold due to short sales, foreclosures and decreased property values.

“It’s a great time to buy because of the market,” says Ivan Sher, partner in Shapiro & Sher Group, Prudential Americana Group’s top-producing company. “Things have turned around for us.”

Granted, the statistics on million-dollar home sales are small-scale numbers: 29 re-sales in Las Vegas in the first two months of 2009, compared with 40 so far this year. “There aren’t as many homes in that luxury price category, which amplifies the appearance of the numbers,” says Dennis Smith, president of Homebuilders Research. “It’s a little misleading.”

Nonetheless, sales have been increasing over the past five months, says Ken Lowman, owner and broker of Luxury Homes of Las Vegas. His buyers typically have to provide proof of their income and assets. And now about 50 percent are from out-of-state, with about half of those coming from California.

Those buyers are reaping the benefits of diminished property value in Las Vegas, experts say. And some areas boast deals even greater than the typical half-off price tag. At The Ridges in Summerlin, for example, sellers got $800 to $900 per square foot in 2007, says Rob Jenson, CEO of Jenson Group, a RE/MAX company. Now, those same properties have dropped to $200 to $400 a square foot.

About half of Lowman’s buyers are paying with cash, compared with about 20 percent during the 2004-07 housing boom, when financing was easier to get. “We’re never going to have the easy-money credit we had,” he says. “We’re never going to have the tight inventory supply we had then. It was the perfect storm: huge stock-market evaluations, low interest rates and the right supply of homes.”

Luxury agents say the number of short sales and foreclosed home purchases has increased. Sher brought on a third-party short-sales negotiator who’s able to directly contact banking senior executives, skirting the traditionally drawn-out process. It’s been necessary, he says, because “we’ve never seen short sales in high end, but now we’re seeing it. It’s almost commonplace.”

All three real-estate agents have ramped up their marketing. Both Sher and Jenson say they’ve strengthened their online presence, and Lowman is flying potential customers from Los Angeles on a private jet to tour foreclosed luxury homes here.

Despite all these efforts, the housing market likely won’t explode again anytime soon, Smith says. He cites consumer confidence as an important factor. “Would you buy a $2 million home if you weren’t sure it [was] going to go up in value?”