Theories how Nevada is hit the hardest by the recession (Las Vegas: real estate market, mortgage)

[Kevroqs]

Please post your thoughts of how Nevada was hit the hardest by the recession.

I believe it's the mass immigration of Californians that hit us the hardest. California is one of the most expensive states, therefore people don't have much savings. They go out and buy houses they can't get, and don't have a job.

[observer53]

Housing boom and bust here, fueled not just by Californians, just like in Phoenix.

Economy not diverse enough, depends a lot on tourism, which drops off in a bad economy.

[Kevroqs]

Originally Posted by observer53

Economy not diverse enough, depends a lot on tourism, which drops off in a bad economy.

Nevada's economy is based on mining and gambling. There aren't any major corporations headquartered here.

[braindead0]

Originally Posted by Kevdawgg

Nevada's economy is based on mining and gambling. There aren't any major corporations headquartered here.

I'd think that mining has saved NV from a worse fate... I'd imagine when times get tough most sane people stop gaming...

[Buzz123]

It isn't gaming or mining that caused the problem. The cause was banks talking people into loans they could never pay back, artificially inflating the value of homes, and overbuilding. For twenty years developers built close to 4,000 new homes a month ─ for TWENTY years, 6,000 new people PER MONTH moved here. Home prices kept going up and up, just like they did in California. And just like California, the bubble finally burst. That put thousands of construction workers out of a job.

But with that kind of construction going on for TWENTY years, hundreds of other businesses that support the real estate market boomed for twenty years, and then also went bust. Businesses like, well - Realtors, floor and window coverings, furniture stores, building materials, swimming pool builders, landscapers, plumbers, electricians, and on and on, went under because, suddenly, almost no new homes were being built anymore. Still, Las Vegas isn't losing population. Go figure.

Although the amount construction here since the crash is probably what would be considered "normal" in other cities, most of the unemployed were from the housing industry; such as framers, dry wall hangers, tapers, painters, concrete layers, tile setters, etc. It affected the resort industry also, but that seems to have recovered. I don't know about Reno, but the notion there is no diversity in Las Vegas is just wrong. People think of Las Vegas as The Strip, but business in this town is a whole lot more diverse than is given credit for. The service industry is the largest employer in the state, followed by mining, but there are thousands of other occupations in Las Vegas that most people never imagine under normal circumstances.

These figures are from City Data, and obviously from before the economic meltdown:

Size of nonagricultural labor force: 811,700

Number of workers employed in . . .

natural resources and mining: 400

construction: 88,100

manufacturing: 23,200

trade, transportation and utilities: 140,000

information: 10,200

financial activities: 46,000

professional and business services: 95,400

educational and health services: 53,900

leisure and hospitality: 247,600

other services: 23,500

government: 83,100

Average hourly earnings of production workers employed in manufacturing: $14.60 (Nevada average)

Employment | Las Vegas Chamber of Commerce

With boom over, Las Vegas enters Era of Normal - Business - ReviewJournal.com

[StaggerLee22]

Another first rate QUALITY post from Mr. Buzz himself.

Muchos |jerry| Garcias.

[Buzz123]

Originally Posted by StaggerLee22

Another first rate QUALITY post from Mr. Buzz himself.

Muchos |jerry| Garcias.

Garcias a ustead.

[eventusstultorummagister]

The housing crisis was the leading microeconomic cause of the recession that impacted Las Vegas so drastically.
The macroeconomic cause was the conversion of the U.S. economy from manufacturer to consumer. The growth in consumption caused debt to rapidly expand but was not accompanied by wage growth so people used their homes for collateral. When the bubble burst the new economic model of mass consumption could no longer be supported and since the premise for growth was based on consumption everything contracted. This is the point where the government stepped in and really messed things up...

You can read all the details in "Anatomy of a Train Wreck, Causes of the Mortgage Meltdown" by Stan Liebowitz.

[AAAplus]

Vegas will come back, given their rising scores on Dr. William Fruth's Policom Economic Index just released for May, 2012, vegas is at #33 out of about 400 large metro areas, beating most large metro markets in WA, OR, and CA


see,

About the Presenter

[=Lavender=]

And it was the Euro banks that were too free when giving the USA banks Paper. Thus the USA banks just opened the windows and gave paper to anyone regardless of their fico. knowing that President of CHANGE would most likely bail them out which he did.

BTW the LUXURY Market did not get hit at all by any of this, fact Luxury RE did very well during the recession.