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Commercial Real Estate Market Still Down in Las Vegas

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By : John Cutts    99 or more times read
The commercial real estate market of Las Vegas, Nevada continues to suffer from huge numbers of vacant properties and foreclosed premises. Analysts have stated though, that the biggest reason for commercial properties' struggle is the decline of the retail industry in the area.

According to real estate experts, the oversupply of foreclosed and repossession properties in Las Vegas has dragged down the values of homes. Along with rising unemployment levels, the foreclosure problem is hugely influential in putting a break on the spending of consumers all around the metro area. And almost everyone knows what this means no consumers spending money, no business for retailers. And if the retail sector is down, so is the commercial real estate industry.

Experts have reported that the domino effect of foreclosed and repossessed homes in Nevada is mostly felt in the Southern Nevada region. In Clark County, taxable sales declined considerably in 2009, although they did post a 2.7% rise during the first 10 months of 2010, according to the Nevada Department of Taxation. However, more problems for the retail sector and the commercial real estate industry are expected in 2011.

The vacancy rate of the Las Vegas commercial real estate market, particularly in the retail property sector, has gone beyond 10% at the start of 2011, realtors have reported. This percentage is considered massive, given that around five years ago, the commercial retail vacancy rate in the area was a mere 4%.

Aside from huge listings of repossession houses, market analysts have also cited online commerce as a big thorn on the side of retailers in Las Vegas. According to them, Internet-based retailers are hurting physical stores, mainly because online sellers are getting their goods from surplus inventories which allows them to sell products at heavily discounted prices. To compete, brick and mortar retailers are forced to lower their prices to the point that profits are going below operating costs.

In addition, most consumers admit that online shopping is definitely more convenient than physical buying. For the most part, experts stated that unless consumer spending picks up, the retail sector and the commercial real estate market of Las Vegas will not be able to fully recover.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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