Thread: The Death Of Las Vegas (Now this is some scary Stuff)

The Death Of Las Vegas

June 12th, 2010 at 1:57 am
60 comments



There are quite a few U.S. cities that are complete and utter economic disaster zones in 2010 (Detroit for example), but there is something about the demise of Las Vegas that is absolutely stunning. In recent decades, Las Vegas has become a symbol for the over-the-top affluence and decadence of America. But now it is a microcosm of the economic nightmare that has gripped the entire nation. When the subprime mortgage crisis stuck, no major U.S. city was more devastated than Las Vegas. When the recession went from bad to worse, Americans decided that they really didn't need to gamble so much and casino revenues plummeted. Suddenly unemployment started to increase dramatically in Vegas and even today it continues to soar. Like so many other cities that are highly dependent on tourism and entertainment, Las Vegas has gone from boom to bust. Local officials are hoping that the worst will soon be over, but the truth is that the worst is yet to come. As the U.S. economy continues to unravel, average Americans will be spending what little money they do have to put a roof over their heads and to feed their families. The truth is that the glory days of Las Vegas are over and they are not coming back.

Already, the number of unemployed in Las Vegas is reaching unprecedented levels. Unemployment rates for the state of Nevada and for the city of Las Vegas both set new records during the month of April. In Las Vegas the unemployment rate in April was 14.2%. For the entire state the unemployment rate was 13.7%. http://tinyurl.com/2462uyn

Of course those are just the "official" numbers. We all know that the "real" unemployment numbers are much higher.

For example, the "official" unemployment figure is about 14 percent in the state of Michigan right now. But if you actually believe that 86 percent of able-bodied workers in the state of Michigan are employed, then perhaps you would be interested in an offer to purchase the Golden Gate Bridge as well.

Elliott Parker, an economist at the University of Nevada, Reno says that the record-setting unemployment numbers in Nevada are just part of a larger trend.... http://tinyurl.com/3xh9uds

"Nevada has been losing jobs since March 2008, and we are continuing to do so."

But where the state of Nevada and the city of Las Vegas have really been hammered is in the housing industry.

It is estimated that a whopping 65 percent of all homes in the state of Nevada are underwater. http://tinyurl.com/27t6mpt

Let that sink in for a bit.

65 percent of all home owners with a mortgage in the state of Nevada owe more than their homes are worth.

Talk about an implosion.

Nationally, the number of homes that are "underwater" is about 24 percent. That is an all-time record for the entire nation, but it doesn't come anywhere close to the nightmare that is unfolding in Nevada and in Las Vegas.

And the number of foreclosures taking place in Nevada is absolutely breathtaking.

According to RealtyTrac, Nevada is still ranked number one for foreclosure filings. In fact, one out of every 79 Nevada homes received a foreclosure filing in the month of May alone. http://www.fox5vegas.com/news/23859325/detail.html

Nevada’s foreclosure rate is now five times the national average.

By just about any measure, the economy of Nevada is a complete and total disaster.

A reader recently sent an email describing the economic horror that is unfolding in Las Vegas. No matter what you may think about the city, the truth is that it is sad to see any great U.S. city fall to pieces like this....

"Las Vegas is a goner. The homeless population is out of control. The real estate is far worse than I have seen in the media (no surprise there). The towers of condos are ninety five percent vacant with zero activity. The streets and parks are in decline. Local governments are busy making cuts and fighting unions. When I ride the streets they are deserted, a big change from 2006. The major casino companies have all but moved the casinos out of Nevada. Rooms and restaurants have been closing for years, even while they finished the new projects. The entire town is a skeleton staff providing substandard service and decaying properties. I still work for one of the majors which is in bankruptcy. When the next wave hits there is nowhere to cut. It will be a game of dominoes with the Wynn properties the only ones left standing. I see the ninety nine cent breakfast making a comeback. The bullet train a day late and a few billion dollars short."

So is there any hope for Las Vegas?

Well, if the U.S. economy gets back up off of the operating table and roars back to life there is little doubt that millions of Americans would once again soon be flying there to gamble away their discretionary income.

But the truth is that any "revival" that is going to happen in Vegas is going to be very short-lived.

The U.S. economy as a whole is caught in a death spiral, and we are about to see a repeat of the housing crash that devastated Las Vegas so badly the first time around. http://theeconomiccollapseblog.com/arch ... -from-over

No, there really isn't any way that the death of Las Vegas can be avoided. Just like the U.S. economy as a whole, it is inevitably doomed. The numbers don't lie.

The grand total of all government, corporate and consumer debt in the United States is now equal to 360 percent of GDP. That is a far greater level than the U.S. ever approached during the Great Depression. http://tinyurl.com/253zla9

The entire U.S. economy is a house of cards built on a gigantic pile of debt and paper money, and it is only a matter of time until it all comes crashing down.

But of course that isn't stopping the U.S. government from spending even more money and getting us all into even more debt.

According to a recent Treasury Department report to Congress, the U.S. national debt will top $13.6 trillion this year and climb to an estimated $19.6 trillion by 2015. http://www.reuters.com/article/idUSN088462520100608

But as many of you who have experienced this on a personal level know, getting into continually increasing amounts of debt never ends well.

So do any of you have a tale to tell about the city where you live? Do you find yourself caught in the middle of an economic nightmare? Feel free to leave a comment telling us what is happening in your area of the United States....

****UPDATE****

A number of readers have chimed in with some very insightful comments. A sampling is below....

Vegas Bob:

I lived here in Vegas from 1998-2006 and moved back at the beginning of 2010. I worked in Corporate Finance for one of the largest casino operators up until I retired.

The article is spot on. Compared to its heyday in 2005-2006, Las Vegas today is an economic disaster zone. The condo I sold in 2006 for $172,500 now goes for $48,900 – a 72% haircut.

It’s not getting any better. Real estate prices are resuming their descent, now that the $8,000 homebuyer tax bribe is gone.

The so-called economic recovery is for wealthy people only. Everyday people just keep getting the shaft. Obama is just another Republican with a ‘D’ after his name.

I’m glad I was smart enough to rent a place instead of buying one. I’m getting the hell out of this hellhole when my lease is up at year-end.

Tiara:

I am born and raised Vegas. When I say I was raised in Vegas I don’t mean a casino. I mean the middle of the dessert 30 miles north from the strip with the lizards and tumbleweeds. Vegas and I have a love hate relationship. I have seen this the growth in this town blow up in my face and now it is imploding just like an old worn out casino. It has been a crazy ride but due to the economy I will most likely be leaving Las Vegas soon. Growing up in this town has been interesting and leaving it will be bittersweet.

Craig:

I lived in vegas in 2006 and have been back to visit many times. I was there recently for the first time after the economy imploded in late 2008—That town is a shell of it’s former self.

On any given night there are half the people on the strip that there used to be. The service even in the 5-star hotels has declined. You can see the lack of morale, sucked from the faces of the wokrers.

I loved this town in its hay day. Right now, it’s pretty sad.

Dolly:

Vegas was, and is, easy to understand. I’m in the musical equipment business– audio– and we go to Trade Shows.

These are held all over the world, but let’s contrast just two places, Los Angeles and Vegas:

If you go to Los Angeles, you will visit with the worlds best engineering talent, and a solidly-grounded people that are there to PRODUCE something OF VALUE. You have small manufacturers, Farm and Ranch people, Oil people, the film industry and plenty of unspoiled, honest, clean-living young people who work hard, and then play hard. Many are Surfers, etc., and are a breath of Fresh Air.

In short, a business convention or trade show in this city is a TREAT.

Now, let’s look at Las Vegas. Everything that’s big there is built around money manipulation and power. No one gives a damn about anybody else. Got a brilliant idea? One that Los Angelinos would want to encourage you to develop and succeed at? NOT in Vegas! Any Casino in town handles more money than that in a microsecond. Besides– who are YOU? YOU don’t matter. Vegas gets all the big shows and all the big stuff– so YOU DON’T COUNT.

Want to hold a convention in a DECENT CITY– say L.A., or Denver? SORRY– Vegas will move right in– bribe the show principals and it WILL be held in Vegas. Look at what happened to the National Finals Rodeo– Oklahoma City was GREAT, but VEGAS has STOLEN it.

Vegas deserves the worst that can happen to it– GOOD RIDDANCE!

Bob:

LV was built by losers. I’ve lived in & near LV since ‘89, watched it grow cancerously, and now the tumor is shrinking… good riddance indeed to a grand delusion. This city is not electrified by the dam — it is fed with coal-generated power from Moapa. Fake Lake Mead is dying too ( and the city is fed by one old pipeline that can break down at any time … There is no primary industry here, just gambling and military — everyone here (except me, of course ) is living the Big Lie. The place is a death trap… stay away!

BD:

I recently went back to visit my old neighborhood (moved out of vegas and sold my house in summer of ‘08 ) and talked with a few of my neighbors. Apparently its so bad they dont even park their cars on the streets anymore because “these damn people siphon gas out of your gas tankâ€

Airborne,

Interesting and informative piece.

To answer the question about whether or not Las Vegas can be saved, the answer is yes, but it involves either 1) forcing the federal government to operate in a lawful manner (it will not do so voluntarily), 2) nullify the onerous federal government controls that are stifling our nation, or 3) simply overthrowing the federal government.

We have learned that government can either support or destroy anything, and right now the federal government is choosing to destroy. That must be stopped before cities and states can thrive once again.

The states have the original sovereign rights to respond to federal tyranny however they choose. Let's hope they get their act together and resume control of the federal government.

Having said that, it will not be an easy job.

wow.............

Went to Las Vegas last in '07, illegals shoulder to shoulder lined the sidewalks trying to hand you information about nudie clubs. You could not even walk without virtually being accosted. This is not a way to spend my vacation, outside outnumbered by illegals or inside with every smoker in the US. Las Vegas helped their own demise by encouraging an illegal invasion.

If I was that much underwater in my house, whether or not I am employed, I am walking out on the mortgage. It makes no sense to continue to put good money after bad, we will not live long enough to see this improve.

However, anyone who is behind on their mortgage because they lost their jobs, and they are not underwater, I believe no bank should be allowed to foreclose on them until they have a job. Then, if the banks want their money back so they can lend to businesses, they will put pressure on business to stop outsourcing and insourcing illegal labor and bring their business back. Unless they hire Americans, they don't get funding.

We went to Vegas for the weekend for our anniversary in the summer of 2006. I saw a town that was booming with construction and cranes everywhere. It was 105 degrees at night. All in all an interesting trip (saw some drunk lady almost drown) but no desires whatsoever to go back.

This story isn't shocking, but I had no idea it was THAT bad!

Detroit, New York, Miami, Las Vegas ... take your pick .. it all looks bad

I hope you are paying attention America

While I will say times are not great in Las Vegas but it is still crowded. Many restaurants are still packed. Casinos are busy on the weekends...We went to City Center this weekend there were many many tables open and they were full they were playing amounts starting at $50.00 and on the continuous shuffle(which I wouldn't touch) those started at $15.00.

There are also slow days like any where else that caters to tourist... Since Las Vegas is a tourist town a lot of it depends on the economy else where ...Well the economy elsewhere is not good, plus there are many more Casino all over the Country now ..Still the strip was busy with people. The usual shows were all still going on at the strip. .. There are very few places where you get the value of good food, good entertainment, great rooms, and yes maybe a chance to win, a lot of it all within walking distance from your room, so for a fun trip there really is no place like Las Vegas.

Local Casinos are cheaper yet. Sure people have cut back and so have the Casinos. Some places are not doing well but that would be expected in these times.......The local places we went to were busy at least the ones that give you value for your dollar and a fun time playing if people don't have fun they won't go.

On the home scene yes there are many homes that are vacant...but there are many homes that were purchased for with cash...if your not selling your not loosing. With the prices down many people are buying...and again many are paying cash and at times there is a bidding war....I know this because I have watched family trying to buy and they get passed over with an over bid and a lot of cases with cash. There is value here...

There also is a lot to see and do here other than gambling, the shopping is awesome, hiking, golf, the scenery, and it is an easy drive to California, Arizona, Utah. The bridge over the dam is awesome to see and hopefully will be completed soon.

Las Vegas as always been the last to go into a recession and usually the first to come out..who knows this time maybe different it may take longer. This is the first time in my lifetime where the whole country is in this type of depression/recession. Well with the exception of few places but in general it is everywhere. After all we are all experiencing the same thing the destruction of our Country and way of life... Hopefully this will change or we all could be set for destruction...

There is a lot to do here and it is a great place to live sure Las Vegas does have challenges and we are having our struggles...but we will get through this we always do...I have lived many places but there is no place like Las Vegas...


Kathyet