Wednesday, August 13, 2008

Is Vegas In Trouble ?

By Xtine

By now the media outlets have let the world know that they think Vegas is in t-r-o-u-b-l-e.

You may have heard of a boom and bust cycle during the past ten years.

Every Las Vegas blog, TV & radio station and publication is overflowing with
messages of woe for sin city.

Having lived here for almost nine years, raised three kids most of their lives here during that time, worked in at least three separate lines of work, been a home owner, been a volunteer, I can say what's going on from my experience or I can let the facts speak for themselves.

First I'll say a bit about my experience. We moved our family of five down here in November of 1999 from Reno in hopes of a wage increase and the possibility of qualifying for an affordable home. We were able to secure steady employment and find a home to raise our family. We've made money on that home. We've had what we refer to as a good life here. My spouse's line of work is hitting a 50 year low. We're still hanging in there. That is an international issue rather than a Las Vegas issue.

Statistics from the DMV, Clark County, UNLV and tourism entities (and other sources such as the Library, Clark County School Dist.) show that Clark County's population has steadily grown at least 5,000 people per month. NET. The population is just slightly less than 2 mill. and is expected to have the gain of 130,000 "permanent" residents in the next two years.

The national average unemployment rate is 6%. In Las Vegas it's only 4.4%.

Since 2001 the average room rate has grown from $76 to $132 in 2007. The occupancy rate in hotel rooms has grown from 84% to 90%, and the rooms have increased in numbers by 6,000 since 2001. There are over 132,000 rooms to rent nightly here.
In the year 2001 there were 35 million airline passengers coming to Las Vegas. In 2007 we had over 47 million. The Convention attendance was just over 5 million in 2001 and had grown to over 6 million in 2007. Here's the big numbers: in 2001 visitors spent over $31 billion here. In 2007 it was $41 billion.

Homes increased in value about 30% for a few years. I believed it was too high and too hot. There was a huge increase of people getting no documentation loans, and getting wild things like furniture, cars, and cash back after buying a house.
Some of the blame has to go to both the buyer and the banks. I believe that after the housing market finishes adjusting, Las Vegans will have an overall increase of 8%
since the year 2000 in the value of their home. That is a respectable gain in value and reflects more of the true market in-my-humble-opinion.

In 1999 homes were selling for $75 per square foot. In 2007 they had climbed to over $150 to $200 per square foot. People couldn't qualify for a mortgage with the jump in price per square foot and huge demand in 2004 and 2005. We went from a population
of 75% of the people being able to qualify to buy a starter home to only 16% of the population being able to afford the home they bought. There are quite a few foreclosures in our neighborhood. But I know there is hope when I see Realtors taking in prospective buyers in to look at them.

There is an abundance of homes available. More on the market than ever before.
Many people are "upside down" on their mortgage. Many people need help. Friends and neighbors have gone to Consumer Credit Counseling. Some have re-negotiated with their banks. A few friends of ours have either been foreclosed on or did a short sale. It's not just in Las Vegas. A lot of people I know have taken in renters.

It's just that it's making me sick to my stomach to hear that Las Vegas is going down the tubes and it's all gloom and doom. Whenever I'm out I see tourists spending money. It's hard to drive around this town because of the crowds. The shows are always selling out, even at more than $100 average price per ticket.

Even if the tourism has dropped a bit this year compared to last year, it's still up over what it was five years ago. Even if room rates have been lowered compared to the expected increase, they are still higher than they were five years ago. Even with the adjustment of "false inflation" most people who were lucky enough to get a fixed rate or buy their house by 2003 in Las Vegas made money on their home.

The good news is if they can ride it out in five years they will make the money back and some profit if they are in the unfortunate position of being 'upside down.' The good news is homes are more affordable in Las Vegas than in most other places. If you're lucky enough to live here but can't afford the entertainment be thankful for your position of being able to tell your friends and family who come to visit
where the cheap and free stuff is on the strip ;)


UNLV's Center For Business & Economic Research.

Nevada Work Force

Respectfully, although somewhat satirically

Xtine on the sin city scene

Global Peace GrooVes w/ Xtine

On the www and on MySpace:

Global Peace

GrooVes Girl in Vegas Blog

Global Peace GrooVes Christine on MySpace.


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