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| Las Vegas is considered by many to have been the heart of the housing crisis. Image: Shutterstock |
The city of sin was considered by many to be the heart of
the housing crisis and many went bust.
Mortgages were being handed out in Las Vegas to anyone hoping to make a
quick buck or live beyond their means, many without even requiring proof of income.
The mad buying spree led to home prices soaring, until the housing bubble
finally burst, and everyone found out they couldn’t afford all of those houses
after all.
In 2006 many casinos
went through a series of layoffs in anticipation of an economic down turn, and
Las Vegas quickly had the highest rate of foreclosures in the entire
country. Too many empty homes led to
severe drop in home prices, and almost 70 percent of homeowners in the city were “underwater” in their mortgages,
meaning they owed more money than the appraised value of the home.
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| Las Vegas had the highest rate of foreclosures in the country. Image: Shutterstock |
Of course, Wall Street turned to the dirt cheap real estate
properties after being spurned by the stock markets several years later, and
many investors began buying bulk lots of land in the area for cash. On top of that, a new law making it more
difficult for banks to foreclose has practically eliminated mortgage defaults
in comparison. Less available homes drove
up prices, which led to a 31 percent increase in prices this year.
Today, the real
estate market in Las Vegas has about five weeks of inventory, a supply that
most agents cannot keep up with. As
housing prices increase—$500 a day in some cases—firms have even resorted to
calling homeowners to ask if they would consider selling. The trend is a great thing for homeowners who
were previously in danger of foreclosure or having to short sell their home,
but many worry that the fierceness in real estate purchasing will end up
causing another housing bubble.
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