STEVE BOTTFELD
Real Estate Exec: Marketing Solutions/Crystal Ball Seminars

Steve Bottfeld was one of the first to predict the Las Vegas housing boom in 2004. He was also the first to predict its demise as well. He earned a justifiable reputation as someone who understands the market.

“Everybody thinks they know what’s going on in Las Vegas,” says Steve Bottfeld, referring to speculation in the Real Estate market. While he is not the only person who makes predictions, Steve has a reputation for accuracy—and for admitting when he’s wrong.

He maintains that the problem with most who predict the future is that they rarely admit when they’ve made a mistake. In Steve’s case, he’s had to admit he was wrong three times in the last 14 years.

Steve spots trends by combining sales data with an understanding of the consumer’s mind. He shares his findings with the Real Estate community by gathering experts on consumer research, marketing, and Real Estate to speak at the Crystal Ball Seminars, which have become the primary source of research-based information for Nevada REALTORS^®.

In addition to organizing the seminars, Steve is one of the speakers as well. At the October 25 seminar, he will share his housing survey data and its impact on the Las Vegas market. Also speaking will be Larry Murphy, co-founder of SALESTRAQ, a comprehensive database for the Las Vegas housing market. Larry will share his third-quarter housing statistics.

With a pre-registration fee of $49 and the option of three annual CE credits, the seminars present information and networking opportunities that are far more valuable than the price of admission.

A native of New York state, Steve coined the term “Manhattanization” to describe the present growth of Las Vegas. “The Bronx and Brooklyn were originally suburbs. Now they’re urban. The suburbs keep moving outward.” Steve sees parallels in Las Vegas. “Green Valley, Summerlin, Henderson and North Las Vegas were originally suburbs, but now they’re urban.”

In addition to the sprawling suburbs, Manhattanization also includes the trend toward high-rises. “In 1999 I predicted 100 high- and mid-rises in Las Vegas by 2010. People laughed.” Now, however, high-rises are an omnipresent part of Las Vegas. He says the actual number of high rises slated for completion by decade’s end “looks to be about 90.”

Land shortages in Manhattan long ago halted the construction of single-family dwellings on the island. Steve says the same phenomenon is in progress in Las Vegas. He says “In 2005 I predicted that in 10 years we wouldn’t be building single-family homes in this market anymore. People thought I was nuts.” As always, Steve defends his prediction with data. He says that the average price of residential land is now approaching $800,000 per acre. He compares that figure with the median family income of around $60,000. In the current market, Steve says, “it’s hard to build single-family [homes] affordably.” The result is the construction of vertical dwellings.

The transition to vertical dwellings is not instantaneous. Steve says that high-rises are now more expensive than single-family homes because of their proximity to the Strip. In the suburbs, however, Steve predicts that vertical dwellings will be affordable by 2010.

Vertical dwellings, combined with the needs of the Generation X homebuyer, are creating the need for dense areas of services and entertainment—Steve named these “entertainment villages.” He says that Generation X homebuyers prefer an urban environment to that “little house in the suburbs with the white picket fence.” They also hate driving. In short, they “want to live in a place where they can hang their keys up on Friday and take them back down on Monday.” For developers, that means surrounding a residential mid-rise with parks and retail. It also means emphasizing security. According to Steve, the most important consideration is making the prospect say, “Yeah, I could live here.”

Steve admits that the Las Vegas housing market has slowed as the market adjusts to Manhattanization. He says that fear is the biggest threat to the market. “Fear renders buyers impotent… Buyers will take no action as long as they fear that Real Estate is in recession.”

Critics have charged that the Las Vegas market is in an L-shaped recession, meaning that the sluggishness will continue indefinitely. Steve, on the other hand, asserts that the recession is U-shaped, lasting only about two years. That two-year slump is set to expire in 2008.

As evidence to support his optimism, Steve points to the fact that Las Vegas has the most vibrant economy in the United States. In addition to ranking No. 2 nationally in job formation, Las Vegas is also in the process of rapid economic diversification. “We’re no longer just a resort and gaming town,” he says. The World Market Center, the Lou Ruvo Brain Institute, the Nevada Cancer Institute, the emergence of dot-com companies and changes in the educational structure are all contributing to diversification.

In addition to diversification, the entertainment industry is also expanding rapidly. Steve says that $33 billion is being spent on new construction on the Strip. That construction brings outside workers into the Las Vegas economy, who then spend their income locally.

Steve says that housing prices are now relatively stable or declining slightly and should begin to appreciate again in the second quarter of 2008. “We’re not in a pricing freefall,” says Steve. “The more people who say that, the angrier I get.” He adds, “You can’t look at an area and dismiss job growth or tourism.”

Steve’s knowledge of the Las Vegas market comes from years of analyzing consumer data. He is the executive vice president of Marketing Solutions, a consumer research organization with clients ranging from Citicorp to Coca-Cola. He has done marketing feasibility studies in Ireland, the Netherlands, Mexico, Spain and the United States. Marketing Solutions has done consumer surveys in the Las Vegas Real Estate market since 1994.

“I like the idea of solving difficult marketing problems,” Steve says. He began building his reputation in 1979 when he analyzed five homes in Oceanside, California. The homes, despite their physical beauty, Asian motif and ideal location, had failed to sell. Steve stepped in to find out why.

“I interviewed the traffic,” he explains. “I sat there for two days and offered people $20 to talk to me.” After talking to about ten people, he called the developer. He had found the answer.

“Oceanside is a military town,” he told the developer. “When people see an Asian motif, they see military—and think transient.” Steve suggested a change in motif, something with a more permanent feel.

The developers begrudgingly invested in a new motif. The day after the newly remodeled homes went back on the market, three out of the five homes sold. Thus began Steve’s reputation as a problem solver and a precise market analyzer—the two elements needed to produce a crystal-ball vision into a market’s future.

In addition to gathering and analyzing data, Steve also presents the information in a useful way. He spent five years as the creator and publisher of the Las Vegas New Homes Guide, where he reorganized the information to make the homes more accessible to buyers. The magazine earned the title “Housing Guide of the Year” according to Housing Guides of America.

Steve attributes his success not only to his marketing and data savvy, but also to his wife. “I was smart enough to ask my wife to be my partner in 1993. She is the reason my business has succeeded.”

Perhaps Steve’s crowning accomplishment in terms of presenting useful market information to the Real Estate industry is the Crystal Ball Seminars. He hopes that his success will fuel the success of builders and REALTORS^® in Las Vegas, and ultimately of Las Vegas itself.

Steve can be contacted at (702) 341-8355.

www.crystalballseminars.com/nev/
www.salestraq.com/las_vegas/index.html
www.lasvegasmarket.com
www.keepmemoryalive.org
www.nevadacancerinstitute.org

Photography: Britt Pierson