LAS VEGAS Almost a Sure Bet
Mortgage lenders see a lot to like about the land of slot machines, Wayne Newton and prizefights.
In this time of slow home sales and empty office buildings, one might wonder if there is any place where buyers have a lot of cash and home prices are affordable. According to Michael D. Costello, Las Vegas surpasses that description. An assistant vice president with Pacific First Mortgage, Costello has lived for 35 years in the town most people equate with slot machines, Wayne Newton and prize fighting.
"Qualifying is not a problem" for Las Vegas borrowers, he says. Although many people leave the town broke after a trip to the casinos, folks who move to Vegas often pay cash for a home.
That's mainly because almost a third of the 6,000 immigrants arriving each month come from California, says Greta Cohen, a vice president of marketing research at Pasadena's Countrywide Funding Corporation. And many of them, Costello notes, are retirees who 20 or more years ago bought homes for around $20,000 in Southern California. Today they can sell that house for $400,000, and head for Las Vegas.
In the second quarter of 1990, the median Las Vegas home cost $111,900, according to the University of Nevada at Las Vegas' (UNLV) Center for Business and Economic Research.
Countrywide's Cohen says 12 percent of new Las Vegas residents are age 65 or older, with another 14 percent ranging between 55 and 64. But Costello figures 40 percent of his mortgage customers are retirees. Down payments are 30 percent or higher on 15 to 20 percent of his loans.
Costello discovered the downside of a strong market when he recently sold his home. "I put it on the market Saturday," he says. "And on Monday I had a cash buyer." But Costello adds that it was "difficult to buy the resale house I wanted." He said he made three offers on homes which "never got presented because the houses had sold already."
In Las Vegas, "another word for a `listing' is a `sold property.'" agrees Coldwell Banker Residential Group senior vice president Don Bonnell. He oversees the real estate brokerage firm's activities in Nevada and Arizona. Bonnell, like other residents, can quickly describe the reasons for living in Las Vegas.
Nestled between the Spring and Muddy Mountains, the town's lights appear to be jewels thrown in the desert when one drives towards Las Vegas at night. Much of its allure comes from the equally exotic attraction of gambling.
Before "gaming" was legalized in 1931, the city was primarily an agricultural center. But it started gaining popularity as a resort area after World War II. Today the hotel, gaming and recreation businesses comprise 31 percent of non-agricultural employment in a town of 758,300 residents.
To support those workers, the attractions welcomed more than 18 million tourists and conventioneers in 1989--and brought nearly $11.5 billion into the Las Vegas economy. Gaming made up approximately $3.2 billion of that total. Since 1982, yearly revenue from tourism and gaming has more than doubled.
More than 73,000 hotels rooms are available today, and occupancy rates are higher than national averages. "Most of the major casinos are expanding," says Coldwell Banker's Bonnell, in order to handle conventions such as the computer industry's 1990 COMDEX -- which had an estimated 120,000 attendees.
Such additions create jobs for local residents and the stream of newcomers. For instance, the new Mirage and Excalibur hotels by themselves are creating about 10,000 new jobs.
Having millions of tourists reduces the need for taxes on residents in Nevada. Personal and corporate incomes aren't taxed in the state. Neither are gifts, inheritances or food bought for home consumption.
In addition, property taxes were reduced by about 50 percent early in the 1980s. Today the statewide rate averages $2.12 per $100 of assessed value.
Residents enjoy more than just low taxes. Besides the casinos--which offer nickel slot machines, free lounge shows and inexpensive buffets--the area has a range of other activities to go along with its 315 days of sunshine a year.
Twenty-one golf courses are in the area, with nine more under construction. Hoover Dam and Lake Mead, the nation's largest man-made lake, provide water sports and fishing one hour away from the Strip.
Valley of Fire offers Indian petroglyphs, while snow skiing is possible from Thanksgiving to Easter in Lee Canyon. Other attractions within a day's drive include Death Valley, the Grand Canyon, Disneyland, Hollywood, the Pacific Ocean and Mexico.
Low taxes, jobs and plenty of attractions bring many new residents who are "fleeing California," says Chuck Baker, real estate editor of the Las Vegas Review-Journal. He says traffic, smog, gangs and overbuilt conditions are driving Californians into the desert. Today, Las Vegas--which means "the meadows" in Spanish--offers...