This first published March 24, 2009 in the Henderson Home News website, a Community Newspapers of Nevada publication.
It can be found in Las Vegas’ foreclosed homes
Have a little cash? Buy a home in foreclosure, for goodness’ sake.
First-time home buyers may be keeping Las Vegas alive as they swoop in on the distressed housing market. There are deals to be had in Las Vegas.
The question of the day is, will they have a job tomorrow to keep up with the mortgage payments?
Last week, I met with a community organizer from Tucson, Ariz., and our conversation quickly turned to the economy — specifically the Las Vegas economy.
He asked when I thought things would turn around for Las Vegas. Whenever I’m asked that or a similar question, I give my stock answer, “Not very soon.” As I have written before, the mortgage dilemma will continue for another four years if the government doesn’t step in to assist. I’m not suggesting the government get involved, but rather stating my opinion on the situation.
The reason I say Las Vegas won’t recover very soon is the same reason the Big Three auto companies won’t recover anytime soon — or at all for that matter.
As I told my visitor, there is little money left for Americans to spend. If you happen to be wondering where all the money is, I’ll tell you what I told him. As I pointed my finger out my office window in a wide sweep across the Strip I said, “The money is out there in all those hotels — and not just those hotels, but also hotels in New York, Atlanta, Miami, Chicago, Los Angeles and many more cities across this country. The money is in millions of cars and SUVs that are being repossessed by banks and finance companies. The money is in exotic vacation spots around the world.
The money is in colleges and universities, spent by hopeful parents so that their children might have a greater opportunity than themselves. Many of those hopes have been dashed by deflating investments and 401(k)s.
Get it? The money is spent! Those buildings and dreams were built on the backs of many American mortgages, and when the equities dried up, the building stopped. Jobs were lost, homes sales tanked, and the economic tsunami was put into a full roll.
In Las Vegas, gaming companies gambled in a big way or never really thought about where the prosperity was coming from. How many gaming companies leveraged themselves? The answer is all of them.
It’s hard to believe the decision-makers couldn’t see this coming. Didn’t CEOs see what was happening in their personal finances? Did they think the boom would never go bust?
As long as tourists were doing their own kind of leveraging with credit cards and home equity lines, the facade — or house of cards, as I’ve been calling it — would hold up. Everyone just had to keep playing.
Now, it is what it is.
I, like many people, made good personal financial decisions by not leveraging everything we own into oblivion. Who is going to bail us out as we are affected economically by the carelessness of others? The answer is no one.
More than 140,000 people are jobless today in Southern Nevada alone. Millions are across this nation. Is there any hope for them? Not immediately.
The reality is no one will get through this recession unscathed. But I’m willing to bet there will be more new small businesses spawned in the coming years than ever before in our history.
That’s a bet worth taking. The final question is, will you be willing to bet on America? If you have a secure job, have never owned a home and plan on sticking around, you should invest in a home.
This is probably a good time for first-time buyers to snatch up a deal, according to the National Association of Realtors. Lawrence Yun, the group’s chief economist, said first-time buyers accounted for half of all home sales last month, with activity concentrated in lower price ranges.
“Because entry-level buyers are shopping for bargains, distressed sales accounted for 40 to 45 percent of transactions in February,” he said. “Our analysis shows that distressed homes typically are selling for 20 percent less than the normal market price, and this naturally is drawing down the overall median price.”
It may be drawing down median prices, but it’s the only action out there right now.
What are you waiting for?