I have been quite negative on Las Vegas real estate for a couple of years and have been advising my clients to hold off investment for a while. I have even write in my Japanese blog about negative statistics on Las Vegas real estate in January.
I have observed a few interesting article/statistics on Las Vegas real estate as below.
I. Las Vegas Suffers a Recession Hangover
This is Business Week article. Las Vegas is very well known as conventions and corporate event destination. In fact, it generate 85 billion revenue to the city. However, under severe pressures from government and share holders, US large corporations (especially financial firms) are canceling events and visits to Las Vegas. This is huge blow to sagging tourism revenue in Las Vegas.
II. America's Unhappiest Cities
Las Vegas, Nev.
Overall rank: 7
Depression rank: 42
Suicide rank: 1
Crime (property and violent) rank: 9
Divorce rate rank: 6
Cloudy days: 73
Unemployment rate (December 2008): 9%
This is also Business Week article. Las Vegas is ranked 7th Unhappiest City in USA. LV is particularly weak in No.1 suicide rate; No.9 crime rate; No.7 divorce rate.
III. 2008 First American CoreLogic and LoanPerformance Home Price Index Analytics
As of December 2008, Las Vegas residential real estate is down by 27.90% compared to same period previous year. This is 3rd worst drop among major MSA.
IV. 58.2 percent of Las Vegas homes have negative equity
First American Corelogic estimate that, 58% of mortgage in Las Vegas have negative equity, loan amount is larger than property value. This is the worst negative equity rate in entire United States and negative equity is the most important reason for foreclosure.
V. 10 Best And 10 Worst U.S. Housing Markets
Based on 20 Cities Case-Shiller Index, Forbes analyzes best and worst market for future appreciation/depreciation. Las Vegas is considered decline in price the fastest.
Las Vegas economy relied quite bit on real estate and tourism. In addition, there are large share of income-strapped-retirees. Therefore this recession has damaged Las Vegas' economy more severe than other markets.
As I wrote in my blog, I think future growth of service-and-manufacturing-job-oriented Sun Belt cities (like Las Vegas) is quite limited.
Thus, it probably make sense to stay away from Las Vegas real estate for a while as correction takes more time.