Unless you’ve been living in an abandoned mine, you’ve heard that Las Vegas leads the nation in foreclosures. Amid all the hand wringing about the Housing Apocalypse, I’ve noticed two things: a ludicrously surprised attitude by people who should have known better, and a lack of media coverage about how the meltdown is affecting almost everyone in the Las Vegas economy, not just those homeowners about to be hit with $4000 house payments after their wacko no down/adjustable rate/negative amortization loans adjust.
Every day the newspapers report that things are going to get worse before they get better, which is a frightening thought for those of us taking business losses in the tens of thousands of dollars right now. That’s why every time I read quotes from officials expressing shock/surprise/disbelief that the mortgage boondoggle is as awful as it is, I always want to ask them, “Don’t you read the paper?” I mean, I don’t know about you, but I would expect that the people who’ve been placed in positions of authority over millions, even billions, of dollars might want to at least glance over a newspaper once in a while. Journalists were writing about the coming disaster two years ago. (Check out this 2005 Sun/AP article, "Interest-only mortgages raise stakes in real estate.") The signs that a massive financial mess was looming couldn’t have been easier to see if they were broadcast on a Strip billboard with showgirls dancing in front of it. I understand that the media has its own challenges, especially here in Las Vegas, but even local business writers were able to see this one coming. How could anyone believe that giving loans to people who had no possible way of repaying them was a good idea? I mean, let me go out on a limb here and pose a question: If the bankers and bureaucrats in charge of things had actually taken action to stop idiotic and exploitive loan practices when the media first reported it, do you think we’d have the mess we have today?
Which brings me to the relative absence of stories about the strain the slowdown has placed on the entire Southern Nevada economy. Construction and real estate are critical sectors of our growth-based economy, and both are in the toilet right now. Many people connected to these industries are dire straits. Furniture stores aren’t selling furniture because people aren’t buying houses. Magazines aren’t able to generate advertising revenue because no one is buying ads. Printing companies are giving killer deals because their presses are idle. Almost everyone I know has been affected by this mess. Pick any business, except for debt collectors and payday loan centers, and I bet they’re hurting right now.
We used to believe that Las Vegas was recession-proof. Back in the days when only a few hundred thousand of us lived here, that seemed true enough. Houses were reasonably priced, and well-paying jobs existed in abundance. Now that we have 2 million residents, I believe we’ve stretched ourselves too thin. The old recession-proof Vegas is now the metropolis of Southern Nevada, and anything is possible.