Condos become a Gamble
There is no question that skyrocketing costs of materials and labor have choked the life from several high-profile luxury condo projects in LV. Six projects have reportedly either been killed or stalled for more than a year. Yet, many still point to the continued construction of 17 other high-rise condo projects, which continue to move forward, as a sign that things are not as bad as everyone claims.
Real estate analyst, Richard Lee, believes the number one problem is construction costs and a lack of skilled labor. The price of steel, diesel fuel, concrete, and other construction materials are driving construction prices through the roof.
For example, a cubic yd. of concrete rose 10% to 15% last year and another increase is expected in 2006. In terms of constructing a high-rise condo project, it means that the estimated 25,000 cubic yds. of concrete needed for a 15-story tower costs $625,000 more today than two years ago.