MGM Signature 1st and 2nd Quarter Update 2011

I predicted in my final quarter MGM Signature update for 2010 that we would see sales begin to pick up slightly at the MGM during the beginning of 2011, but that sales might become volatile after that time due to lingering uncertainties in the economy and housing market. As predicted, sales did accelerate with 73 units closing in the first quarter of 2011 (51 studios and 21 one-bedroom units.) By comparison, there were 63 units sold at the end of 2010...an increase of almost 20%.

The highest priced studio closed for $214K (unit #135-3507) and the lowest priced went for $112K (unit #135-2318.) This resulted in an average of $159K for studios. The high sale for one-bedrooms was $335K (unit #135-3001) with the low sale coming in at an amazing anomaly price of $138K (unit #125-1102.)

The most significant trend I spotted as we moved into the second quarter of the year, was the drop in inventory and sales and the corresponding rise in average sale price. In the second quarter of 2011, only 31 studios sold (as opposed to 51 in the first quarter) and only 10 one-bedroom units closed (21 in the first quarter.) Simultaneously, we saw the average sale price for studios climb from $149K in the first quarter to $159K in the second.

The gradual climb in price that we have seen at the MGM over the last several months corresponds with my prediction last year that we had seen the bottom of the market for high rise units in this development.

There are three major points that indicate that we will continue to see prices rise gradually at the MGM:

1. There are a total of 1824 units in the MGM Signature Hotel Condo development. Of these, over 700 units have turned over since their original sales dates. This is nearly 40% of the total and represents a disproportionately large number. This means that most of the investors who needed to get out when property values tanked have done so, and those that remain have most likely decided to hold out for the long haul. This means that we will, most likely, not see another large wave of foreclosures and the accompanying price cuts that they produce.

2. Lack of inventory...with the majority of “fire sales” now being completed, we are seeing the available inventory at the MGM continue to shrink. Less supply with steady demand necessitates price increases.

3. By reviewing the docket for upcoming Trustees’ Sales, we are able to see how many units are going to be available at a discounted price. Currently, inventory at the Trustees’ Sale has slowed to a trickle.

All of these items point to the fact that anyone interested in purchasing at the MGM Signature needs to take a serious look at the available units before prices move beyond their current levels. Unfortunately, it can be very difficult to purchase a unit at the MGM. Competition for available, reasonably priced units is fierce. I am the number two salesman at the MGM and I still have difficulty getting my clients good units, or sometimes, any units at all. In order to combat this competition, I look for great deals at the Trustees’ Sale, through REOs, with short sales, and regular listings.

If you are interested in purchasing at the MGM Signature, as an investor or for personal use, or if you are a current owner looking to review your options, please contact me directly and I will be happy to share my expertise on this development with you.