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LAS VEGAS-Some 98,400 luxury condominium units here are somewhere along the marathon route from announced to completed, including those that got sucked down a sewer grate. In fact, 3,900 have made it over the finish line and 11,100 are under construction. Combine those two numbers, and you get 2,400 more than the number of units (12,600) cancelled or suspended in the sales process.

Locally based Applied Analysis, which produced that data, says that even in Las Vegas there is insufficient demand to absorb all the units in the pipeline. AA principal Brian Gordon tells GlobeSt.com he expects only an additional 3,500 units will be started and completed before the end of 2010 for a total of 18,500 units, or about 19% of the total potential units.

“Over the long-run, market demand will be driven by end users,” Gordon says. “Much of the demand over the past two years has been sourced to investor speculation. In today’s cooler climate, developers will be forced to focus on leisure travelers, second-home buyers and future retirees.”

Gordon’s business partner Jeremy Aguero says as many as 60% of all closed luxury condo unit sales may enter the market over the next 36 months in the form of resales, providing competition for developers.”Price, location, branding and amenity packages will ultimately dictate the success of any given project,” he says. “Developments with mixed-use programming, including quality day-to-day retail outlets will maintain a competitive advantage over those less ‘amenitized’ alternatives.”

Other tidbits from the report:

  • Of the total condominium market, approximately 44,200 units maintain some sort of rental program (Condo-Hotels). Of those units that have the potential to be rented out, approximately 75% are located on or around the Las Vegas Strip.
  • Resale Inventory (Available Units)-As of the end of the quarter, an estimated 557 existing (resale) luxury units were on the market. Those units, which were listed by Realtors, have an average asking price of $861,000, or $639 per sf.
  • Resale Closings-During the fourth quarter, resale units that sold averaged $699,200, or $642 per sf.
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