What happened in Vegas didn't stay in Vegas. The foreclosure epidemic as forecast by Housing Predictor more than two years ago has infected the majority of the nation, including Nevada with the majority of its housing markets seeing unprecedented depreciation. The housing bubble bust has triggered a global banking crisis, prompted government intervention not seen since the Great Depression and triggered at least a long and painful recession.
In so many ways Las Vegas, Nevada is symbolic of America's housing crisis. The desire to make a fortune seems to run in Americans veins, but it's tough for the little guy who has to go out and get a loan on his or her own. Losing money and bad credit are critically at risk. Greed is part of the equation gambling in Vegas' casinos. We all wonder what it would be like to hit the jackpot, if not for more than a momentary lapse.
Along the Vegas Strip, Casinos are having hard times these days, roiled by the nation's credit crisis. Most are now owned by corporations and until the credit crunch gamblers filled the gaming halls in record numbers. Now, Las Vegas is a ghost town of its former self. The real estate crash has abruptly changed this dessert oasis, where the lights flicker like glowing billboards inviting you into the gambling mecca.
The sale of homes in and around Las Vegas is riding a short lived spike, mainly due to foreclosures that have had their prices slashed. Many are selling 50% below what they were bought for during the boom. Vegas is one of America's foreclosure epicenters, and the center of subprime and Alternative "A" adjustable rate mortgages that practically anyone could qualify for during the boom.
The housing crash in Vegas is far from over, despite 30% plus deflation in 2008. Far too many foreclosures and a second round of resets on more than 190,000 adjustable rate mortgages in 2009 alone in Vegas will send a large percentage of additional homeowners into foreclosure.
 |
| City |
Forecast |
| Las Vegas |
− 27.1% |
| Reno |
− 17.9% |
| Lake Tahoe |
− 16.1% |
| Carson City |
− 14.7% |
As a consequence of the nation's recession, increasing foreclosures and slower than average home sales Housing Predictor forecasts Las Vegas home prices will sustain average housing deflation of 27.1% in 2009.
In Reno, where homes have also deflated at double-digit rates, the market also spiked with increased sales. But additional foreclosures, a toughening economic environment and a lack of consumer confidence is making Reno a tough place to hold on to a home for many. The market is headed for another deflationary year in housing. Reno home prices are forecast to deflate 17.9% in 2009.
In neighboring Lake Tahoe, which shares its border with California in the Sierra Nevada Mountain range the second home market is suffering through the worst deflation in history. Home and condo prices in this highly regarded second home and vacation market are taking a bruising. Home prices are already down as much as half from their peak, and are certain to fall further before the credit crunch's impact is complete.
Lake Tahoe home sales revolve around second home market buyers, who are not as motivated as they once were to put down their money to buy property. Most are waiting out the market before they step back in to make a purchase. Lake Tahoe home sales are projected to remain slow in 2009 on forecast deflation of 16.1%.
In neighboring Carson City, the economy revolves around snow skiing resorts, which are just trying to make it through the economic downturn without going bust. Foreclosures are rising in Carson City and many other small towns nearby. Prices are declining and will be cut by a forecast 14.7% in 2009.
