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"Welcome To Las Vegas: Bank Owned"

Discussion in 'Casino Industry Discussion' started by NASHVEGAS, Jul 27, 2010.

    Jul 27, 2010

    NASHVEGAS Banned User - flamming, disrespecting admin,

    You must register/login in order to see the link.


    "Nevada's Economic Misery May Be America's Future"

    First Posted: 07-27-10 04:20 PM | Updated: 07-27-10 04:33 PM

    ""So many homes in Las Vegas have been foreclosed upon that banks rarely bother to hang a "For Sale" sign on the front lawn anymore. Instead, visitors identify bank-owned properties by the brown grass and the 8.5 x 11-inch sheet of paper taped to the front door or the garage.

    On a cul-de-sac in the once-pleasant neighborhood of Silverado Ranch, Larry Wood is the last remaining resident. Two of the four homes are in foreclosure and a third is a "party rental" only occupied by rowdy tourists on weekends. One of his neighbors made a few bucks before abandoning the home, he says. "They sold all the palm trees and just walked away from it," says Wood, sporting a "Freedom Isn't Free" T-shirt. "It's a great neighborhood. I guess that people weren't financially set up to get through the crash."

    Wood takes little comfort in being the last resident. "Sometimes it's scary. There's a possibility someone would try to rob me and I wouldn't have any neighbors to help me," he says, recounting a previous attempted intrusion when his then-neighbor called to warn him not to answer the door because there was a group of thugs knocking. Armed and ready, he huddled near the door but the gang gave up and left.

    Walking away is becoming a habit among law-abiding residents too. It's hard to find a home bought before 2009 that isn't underwater and very few landlords, when running credit checks, look for foreclosures or short-sales on a tenant's record. Otherwise, a manager couldn't fill a building.

    Nevada has a greater concentration of economic misery than any other state. The state's unemployment rate, which in June edged up to 14.2 percent, has risen faster during the past year than it has anywhere else, and nearly six percent of all homes across the state's desert landscape received a foreclosure filing in the first six months of the year.

    While the concentration of misery may be greater in Nevada, it was caused by the same unchecked housing bubble and unregulated financial gambling that brought pain to the rest of the country. If present trends go unchecked, Nevada is America's future.

    The jobless rate would likely be much higher, say residents, if Nevada were not such a transient state. When folks lose their jobs and their homes, they often pack up and move in with relatives.

    Others, though, have roots in the state. Robert Garcia, 58, moved to Vegas more than a decade ago to take a job with what is now MGM as a video producer. Back in Salt Lake City, Utah, he'd met his wife, an anchorwoman, on the set. She went to work for US Airways in Las Vegas. The couple, who have two kids, divorced several years ago and sold their home at a healthy profit, which they split. Garcia put $100,000 into a new home that he bought for $350,000. Making nearly six figures, he said, he had no problem covering the mortgage and the $2,400 in alimony and child support. In 2008, things took a turn for the worse.

    He has been able to weather the downturn, he says, because he always lived within his means -- no credit card debt, no car payment. He has a "junky car," he says, that his kids are embarrassed to ride in.

    "It's funny," Garcia adds, pausing. "Just before I was laid off, I was gonna buy a BMW." He pauses for another long moment as his eyes well up. Asked where he is living now, he breaks down instantly, tears pouring down his cheeks, knocking his contacts out. "Actually, I'm looking for a place. I'll be right back," he says, leaving to compose himself.

    When he returns, he says that he's still in his home, which is more than 50 percent under water, but will be leaving as soon as the bank approves a short sale. He had an offer several months ago, but the buyer, a teacher, backed out at the last minute. She'd been laid off.

    Garcia has applied for 200 jobs all across the country but, at his age, employers want younger workers, leaving him to scrape by on freelance work. He has nothing left, but one bright spot is that the devastation in Vegas is so profound that landlords tell him they no longer check credit reports for short sales or foreclosures. Garcia's wife, meanwhile, has been laid off by the airline, as fewer tourists fly into town. She's now on welfare, he says, and, as a consequence, half his wages are garnished. (Welfare policy requires such payments to be made through garnishment.) He doesn't mind, he says. His bigger fear is that the only job he'll be able to find will require him to leave Vegas and his children.

    Meanwhile, the debate in Washington enrages him. It particularly galls him that Republicans say help for the unemployed must be offset with spending cuts elsewhere. Garcia, in fact, volunteers the term "offset," expressing a better grasp of economics than most of the deficit hawks in Washington. "It drives me crazy when they say that. There's nothing to take from! Where are they going to offset it?! What's the phrase? You can't get blood from a turnip," he said.

    "This is my hometown and I've watched it struggle and go through so many challenges, particularly over the past two years," says Julie Murray, president of Three Square, a food bank in Vegas that distributes food to more than 300 partner programs and schools around town. "The way that this economic downturn has been different from others is that I've never seen the gaming industry be impacted. Our community would suffer when the economy suffered but gaming was always resilient."

    Three Square delivered 10 million pounds of food in 2008; this year the food bank is on track to distribute twice that amount (some of the increase, Murray said, owes to the fact that Three Square is growing; the nonprofit was founded in 2006). Murray said corporate donations to the food bank have been down during this recession, but individual and foundation giving has remained steady. "We've been able to sustain distribution of food in a recession because of the sheer will and passion of the community," she said. "Things are dire -- we have more children who are struggling with hunger and more seniors and more families and more middle class families who never thought they'd need social services -- however, Las Vegas is rallying."

    "Nevada was pretty much a growth economy for most of the past two decades," says Steven Horsford, the Nevada State Senate's Minority Leader, a Democrat who represents North Las Vegas. "When the financial crisis hit, it disproportionately affected Las Vegas because of our growth rate."

    Horsford says the local economy is struggling not because fewer tourists are coming to Vegas, but because the people who do come are spending less money. (A cab driver complains that he doesn't have many fewer customers, just more families haggling over the $60 fare.) Horsford said Vegas needs to switch from relying on casino tourism to green energy and medical tourism.

    "We were used to being able to help virtually all segments of our population get a job if they wanted a job, have benefits, earn money to put their kids through college -- we called it the Las Vegas dream," he says. "From a leadership standpoint, knowing that two-thirds of all homes are either upside down or are in foreclosure is one of the most humbling realities we are dealing with."

    The decay in Vegas doesn't stay there: It reverberates throughout the state. "Coming Soon" signs have been pulled down across the city, because nothing is coming soon other than more foreclosures. The Nevada landscape is pockmarked by empty condos and casinos, some of them fully built and sitting there empty, others are shells frozen in time. When analysts talk abstractly about Wall Street sucking capital out of the real economy, these stalled construction projects are the on-the-ground reality. "60% Reduced Prices" promises one empty condo development.

    The $3.1 billion Fontainebleau Las Vegas construction project sits nearly complete but the lender pulled out and everybody is suing everybody else. The first Ritz-Carlton in the company's history to shut down is in Las Vegas.

    The city's dance clubs aren't empty, but there's less money circulating. "Saturn," an exotic dancer at Spearmint Rhino, says she and her fellow dancers are making roughly half what they were two years ago. The house she bought for more than $450,000 on an interest-only loan is now worth a third that. She's negotiating a short-sale with the bank.

    The Dunkin Donuts that opened in Fabienne Chalaye's neighborhood five months ago is already empty. "Dunkin Donuts... It's all empty. Everything is empty," she marvels, while giving a HuffPost reporter a tour of the city.

    Chalaye, a chauffeur, says her business is down roughly 60 percent over the last two years. It slowed down almost imperceptibly after 2006, then fell off a cliff in 2008. She hasn't made a mortgage payment in 15 months and expects to be booted from her home, along with her husband, her adult daughter and her daughter's boyfriend any day now. She bought the house in 2008 on an interest-only loan for $313,000; it's now worth $117,000 and her interest rate shot up to 12 percent. Both she and Garcia, however, say they're leaning toward voting for Harry Reid to return to the Senate, because they have no faith in his opponent, Sharron Angle. "'I wanna get rid of Social Security,'" Garcia quotes Angle saying. "How stupid is that?"

    Garcia says a friend of his in the crane business told him he was offloading the hulking useless tools to builders in China because it isn't worth the cost of storing them. "Office Space Available" blares a sign next to a stalled office project.

    A five-bedroom home with Spanish tile and a game room sits vacant on half an acre of land. "This property is Bank-owned. We reserve the right to prosecute any and all trespassers illegally accessing the property. Thank you for your cooperation."

    The Nugget Casino in tiny Searchlight (population: 576), about an hour from Vegas, laid off a third of its 85 employees in the past two years to cope with reduced demand for the Nugget's slot machines and chicken fried steaks, says owner Verlie Doing, 86.

    "We had a great banker when we built this place," says Doing, who opened the Nugget with her husband in 1979. Now, Doing says, she doesn't think Wells Fargo will give her a loan to fix the three air conditioners that recently failed. "I'm not gonna talk to the bank. I'm not even gonna bother to waste my time with 'em."

    Doing, a friend and supporter of Harry Reid, is optimistic. "It's gradually getting better," she says. "Not noticeably a bunch better -- but it's getting better."

    Sarcastic references to President Obama's 2009 stimulus bill can be seen throughout the Las Vegas area, from glossy Keno fliers at Vegas hotels to the mysterious sign by the front entrance to the Nugget advertising a "Great opportunity" to "stimulate yourself" and make money. "You won't need a bailout. Call Barry."

    Reached by phone, Barry Bunnell of Chloride, Ariz. -- a town even smaller than Searchlight -- explains that he's been trying to hire people to sell his Easy Out Fire Protector product, a bottle of fire retardant liquid that's handy for snuffing out small pan fires, especially in RV trailers. Bunnell needs people who can go door-to-door demonstrating the product.

    He says he received 37 responses to the Searchlight flier, but nobody was interested in sitting down for an Easy Out interview after Bunnell described the job. He suspects they'd rather stay on unemployment benefits and use the Easy Out inquiry as an easy way to prove to the state they're still looking for work. (That the unemployed would rather draw benefits than look for work is a common argument among congressional Republicans, even though there are nearly 15 million people looking for three million available jobs.)

    "You can sell two for $39 and keep $20," says Bunnell of his product, "and people won't do it because it's beneath their dignity.""
    3 people like this.
  2. Jul 27, 2010
  3. Simmo!

    Simmo! Moderator Staff Member

    Web Dev.
    Paints a pretty bleak picture but I guess that was the point of the article.
  4. Jul 27, 2010
  5. vinylweatherman

    vinylweatherman You type well loads CAG MM

    STILL At Leisure
    United Kingdom
    Sounds good. I'll sell a couple of fruit machines and a classic pinball, and move to Vegas:D

    Trouble is, I would have to play the crappy "Microgaming US" software, maybe not worth it.
  6. Jul 27, 2010
  7. love2winalot

    love2winalot Dormant account

    Roulette Player
    Philippines/Visiting Las vegas
    Hiya: The house we bought last year was bought for $110,000 by the previous owner back in 2007. It was rented out. It was foreclosed on by the bank. We bought it for $21,900 cash. It was a wreck. All the copper plumbing lines were gone, the bathroom torn up, the windows broken, the sheet rock had huge holes in every room, and so on. We spent apx. $8100 to fix everything.

    So, We have an investment of apx $30,000. It is actually now worth between $70,000-$80,000. A lot less than the $110,000 from a few years ago. When we bought it, there were over 12 for sale signs in this neighborhood. Now there are zero. People who were buying homes at a discount for $150,000, and then re-selling them for $200,000 are still there. It is that they are just buying houses at a lower level, and re-selling them at a lower level. I have seen houses we looked at for, $24,000-$27,000 last year, being bought, and nothing at all done to them, and being re-sold for $50,000-$70,000. It is the same game, just at a lower level.

    Of note, to Nash post, there were some interview done here in vegas, about, "Where did all the realators went"? If you go to any realator office, they have about half of the realators they used to have. Most realators are women. What other job could they go to, that would pay close to what they were used to making selling houses?................Come on, you know the answer...................................;)

    A lot of my wifes co-workers bought homes in the Summerlin area. It was going to be a second city to las vegas. As the home values fell, and the expansion of adding, schools, shopping centers, and so on stopped, and construction stopped, you had people who paid $250,000 +, for their home, that is now worth less than $180,000. So, a lot of them just walked away.

    This affects gambling as well. Not every, "Local" is an idiot", betting the rent money, car payment money, and the like. Most, just Gamble with the entertainment money. But things are so bad, they just don't have any entertainment money left over.
  8. Jul 28, 2010

    NASHVEGAS Banned User - flamming, disrespecting admin,

    The following statement in the article is the point of the article imo, "While the concentration of misery may be greater in Nevada, it was caused by the same unchecked housing bubble and unregulated financial gambling that brought pain to the rest of the country. If present trends go unchecked, Nevada is America's future."
  10. Jul 28, 2010
  11. silcnlayc

    silcnlayc Just one more spin pleez! CAG MM PABnonaccred PABaccred

    IT Director of Operations
    Left Hungary
    Being on the backside of real estate , I have seen some really , really bad deals go down. Realtors are not all to blame. They couldn't make a sale if it weren't for a buyer wanting to buy.

    What I noticed in the last few years during this "bubble' was a buyer was willing to do whatever it took to buy a house just "like my friends" if not larger and better even when they had no money down..Great credit but no personal monetary investmest to give..so....they went where the money was..banks, mortgage companies etc...to get that deal that they just couldn't pass up, the interest only loans that would buy so much more than they could have afforded on a regular mortgage.

    I know during this time so many buyers bid on homes to the tune of doubling the list price of the home..this was not the Realtors fault or the homeowner..it was the buyers need to one up their friends , family, and neighbors any way they could..they just had to have it NOW...and bid the home higher than it was worth..

    I heard many agents tell buyers to wait it out..but many of them went to other places and demanded other agents to write offers for them..and this caused the bidding wars in our area...

    A lot of this stems (IMO only) from people (younger generation) wanting to have it immediately (instant gratification) what the older generation worked for , for forty years to get. Classic example was my younger son who wanted a large house...I asked him why..he was single had no kids etc etc..and explained to him the rules of life...and he (thankfully) decided to take my advice and he ended up puchasing a small, 600 sq ft 2 bedroom house ...not happily but he did this for me...

    My heart goes out to those wishing that they were shown a little better that they were not "owed" anything...and given better advice by their parents...to slowly work their way up to what they wanted and were stable enough to hang on to what they had..

    Real estate cycles every 5-7 years...I was in foreclosures for 7 and 1/2 years....and know this too will pass....I handled up to 75 foreclosures a month at any given time...then it petered out to around 4-8 a month back in the 90's....so it does change...and will get better...people tend to forget this, if they were never in the real estate/appraisal/foreclosure field of work for as many years as I have been and I have seent his cycle repeated three times now.....

    The fault lies on many shoulders IMO....as always..

    Last edited: Jul 28, 2010
    2 people like this.
  12. Jul 28, 2010
  13. gloria460

    gloria460 Meister Member

    It's odd that this thread came up today. I was thinking I just barely made it before the housing market blew up here in Fl. I had my home built for 93,000.
    3 bedroom, 2 full baths and two car garage. It's only 1800sq feet but it's only three of us.

    Two years later my home was almost double it's value due to all these crazy people buying up homes and flipping within the month. Neighborhoods would be sold out instantly with people camping out..driving the price up substantially. I almost sold but thankfully I didn't and I'm still in a home that I can sell for a good profit if I wanted to.

    It really is ashame as to what greed can do to a person. Silnlac I believe a lot of people have forgotten that they're just as responsible.
  14. Jul 28, 2010
  15. silcnlayc

    silcnlayc Just one more spin pleez! CAG MM PABnonaccred PABaccred

    IT Director of Operations
    Left Hungary
    Same here, still have equity since we have been here over 17 years...we were tempted, my husband is a good listener too thank goodness,
    but I knew what was coming so I convinced him it wasn't too smart to move just yet so we hung in here when the homes all around us were going for some outrageous prices...now, we have a few foreclosures in our neighborhood where they were purchased during this time...they sold for over $100,000 more than they were worth...and now they are all empty...
    This is where we might have been had we, too sold...losing our monies and our home....

    1 person likes this.
  16. Jul 29, 2010
  17. felicie

    felicie Dormant account

    self employed
    somewhere else
    In regards to house value I am very glad I live by the beach. Back to Nevada, I've always wondered what one did there if they didn't gamble. :confused:

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