Why was Nevada real estate hit the worst in all the United States?

According to the FEderal housing Finance Agency (Purchase Only index), weighted avg., period ending March 31, 2009, out of 50 states + DC, Nevada finished last in losing -31.10 for the last year, and overall -18.40 for the last 5 years.

The US overall lost -7.14 for the last year, but gained 9.82 for the last 5 years.

The next worst performer was Florida, at losing -22.46 in the last year, and -0.97 in the last five. (Then California, Arizona, and DC for the bottom of the barrel).

Alaska led the crowd for last year gains.

I’m guessing these are percentages of the price?

In any case, why was Nevada so hard hit?

Look at the areas that gained the most during the bubble. They’re mostly the areas that lost the most when it burst.

So I would argue for a terminology change. They weren’t “hardest hit” but “most over-valued.” The value was simply never there to begin with, and people realized it once they came back to their senses.

I don’t have all the story, but a few parts.
Nevada has the highest residential foreclosure rate in the US.3.7% of residential motrgages are in foreclosure, with 12.1% of mortgages being delinquent. So there is a wave of houses that are being sold by the banks, or with the threat of foreclosure. 66% of existing-home closings in March were banked owned.
In 2003-2006 there was a huge increase in the cost of homesin Las Vegas, almost doubling the average cost.
There is also news that new-home building permits are down over 50% from last year. So added to the mix, there are probably also builders who are trying to get rid of inventory. That not only drops the cost of the houses, but it’s also going to drop the value of all the houses in the area (Why buy that 4yr old house for $300k, when I can get a new one in the same development for $150k?)

The Las Vegas market was nutz. People were not being real in their purchases. that market had to drop. People were buying houses as investment hoping that the price would go up. I know some people who bought a house but could not find renters, so the houses would sit empty. But there were a lot of out of state buyers that raised the prices.

But there was too much product for the market. If there are 100 investors and 90 houses prices go up. When there are 90 investors and 100 houses the price will go down, then there will be 80 investors and the market drops.

I believe even if the ecconomy had not dropped the housing market would have.

On top of that business is down on the strip and people are loosing their jobs. Which means less home owners and less rentors. I know my 4 plex has 2 vacancys and the vacancy rate in the area is 30%.

Buyers there were, well, gambling.

Hmm…maybe because Nevada owes its existence to gambling, greed, overconsumption, sleaze, and other things which don’t encourage intelligent rational people to live there? :mad:

You are aware that the primary customers of the local gambling establishments are tourists, right?

If you keep hitting on 17, of course you are going to feel this way!

What your post says is that you know nothing about Las Vegas except what your minister tells you.

My sister and B-I-L are exceptionally rational and intelligent, and both are on the faculty at UNLV – hired, I might add, to help address a horrendous teacher shortage due to population growth and the building of new schools to accommodate the surge, which no doubt contributed to the housing boom that made Las Vegas vulnerable to the bust.

It’s easy to spot the Born Again’s, the giant bulls-eye makes it easy.

Many cities in the southwest have been growing at a pretty good clip. In fact, Vegas was one of the fastest growing cities in the nation. As a result of the growth, property developers started moving into the market pretty heavily.

The hype feeded on itself. Tourism was going strong. So more people moved to Nevada to get jobs. Those people neede homes, so construction kept going strong. Those workers needed homes. So construction kept going.

I remember one of the bullshit stories we used to hear from developers looking to do deals in Nevada was that the Federal government owns 80% of the land in that state. So we had to get in and get deals done because they were going to run out of privately owned land. Yeah right.

The demand for homes was increasing. More homes went up. The prices kept getting higher. Some of that was due to construction costs. Some of it was due to low mortgage rates and mortgage structures that allowed people to super-size their dreams with a low down payment and low initial payments.

As prices accelerated, more people bought homes, because they bought the bullshit from the realtors that home prices were going to rise ad infinitum. More homes get built.

Then…

Too many homes are built. Prices aren’t going up any more. People can’t use equity in their homes to refinance out of their mortgages because they don’t have any. Foreclosures start coming in. Construction stops cold. Construction workers are out of jobs. Tourism slows down. Service employees are out of work. The spiral continues.

What happened in Nevada is unbelieveable acceleration due to growth in the market and aggressive development, lending and buying. In a nutshell, the price of homes increased far above what they should have been.

When the recession hit Nevada had a large segment of the population working in very cyclical industries, tourism, services and construction. Prices had no place to go but straight down.