Fascinating new article that came out in The Atlantic full of historical trends to support theories:

How The Crash Will Reshape America

I saw a city or two that I used to live in but the one that stood out is Las Vegas for obvious reasons:

"But in the heady days of the housing bubble, some Sun Belt cities-Phoenix and Las Vegas are the best examples-developed economies centered largely on real estate and construction. With sunny weather and plenty of flat, empty land, they got caught in a classic boom cycle. Although these places drew tourists, retirees, and some industry-firms seeking bigger footprints at lower costs-much of the cities' development came from, well, development itself. At a minimum, these places will take a long, long time to regain the ground they've recently lost in local wealth and housing values. It's not unthinkable that some of them could be in for an extended period of further decline."

I came across this article while doing research on the current commercial real estate health for Las Vegas real estate for my Las Vegas Real Estate blog. The information contained has been quite fascinating to say the least and while we have been concentrating on the amount of residential Las Vegas foreclosures taking shape, it's important to understand and prepare for the upcoming commercial real estate collapse and what effect this will have.

People who invest in Commercial Real Estate generally have more money then your wannabe Las Vegas real estate investors who purchase single family homes as "investments" that have now come back to haunt everybody with their lax lending loans. While it's sad when somebody loses their home to foreclosure, it's extremely sad when somebody shuts down a business and lays off people they employ.

We currently have over 8,000 construction jobs in place for City Center Las Vegas alone and when this project finishes up in late 2009, you really have to wonder where they are all going to go since new construction is pretty much coming to a halt. There is no demand for new construction in Las Vegas so it's going to be really interesting as the next wave of failures comes on line. As far as I know, there is nothing in the new stimulus bill for Southern Nevada that will replace these 8,000 high paying jobs... payed for in the private sector and not the taxpayer. (In other words... the 8,000 jobs do not cost you anything unlike the jobs being created in the stimulus bill.)

I came across another study done by the FDIC on Commercial real estate constrution done all the way back in 1997 that highlighted the risks of all the overbuilding in Las Vegas... I'll be sharing this information on my Las Vegas Real Estate blog concerning the next crisis taking shape. Quite fascinating with all of the warning signs of overbuilding in Las Vegas and what this would to the commercial sector all the way back in 1997. In other words... it's been an avalanche ready to come down to bury a city built on the real estate boom... and the false economy it created.

Unfortunately it's very negative information but information that should not be ignored if you really want to represent clients in their best interest.

Stay Tuned...

How will the Real Estate Crisis change your city?

Paul Francis, CRS
Las Vegas Real Estate
702.592.305