Foreclosed: The housing crisis in Las Vegas

The Las Vegas Strip is seen behind residential neighborhoods. Las Vegas currently holds the title for the city with the highest number of foreclosures in the country.

Kai Ryssdal: We're calling our coverage of the election this year The Real Economy. What actually matters to people -- their future and their prospects.

So here's the headline number you need to know about Nevada: The unemployment rate is 13 percent; where one of every 14 homes -- more than 7 percent -- are in foreclosure. And where a day before the Nevada presidential caucuses, one of the best hopes for something new in the Las Vegas economy rests with a guy who sells shoes for a living.

We'll get to that last bit in a minute, but the real economy? You can't get more real that what we found up in North Las Vegas, about 20 minutes from The Strip.

Although, I gotta tell ya -- it seems much farther.

Ryssdal: Here we are in front of a foreclosed house. This being Las Vegas, there is no grass to be brown, but the pebbles are brown enough. It's a gravel front yard.

Lori Galarza's our real estate agent, giving us the loneliest house tour in the world. And if it sounds quiet and sad, it's 'cause it is.

Every city has foreclosures. Las Vegas has them by the neighborhood-full.

Ryssdal: So Lori, tell us what this place is and how distressed is it.

Lori Galarza: We are looking at 10 days on the market, 17,000 square feet, 7,400 square foot lot. Priced at $99,000, $58 a square foot.

Ryssdal: And when you say distressed, you mean?

Galarza: Usually you want to look for tell-tale signs -- this one you don't see weeds growing up in the yard, so this doesn't look like it's been vacant for long.

The house across the street is a different story. Smashed windows, weeds, the whole foreclosed-house stereotype going on.

And then I looked in the window.

Galarza: Is it trashed?

Ryssdal: Oh yeah, oh my.

Galarza: And it does not have For Sale sign, so it could be one of those houses where...

Ryssdal: It's been empty for a long time and got broken into.

Galarza: Yeah, if it's foreclosed or not foreclosed yet.

Ryssdal: Oh no. Someone did damage to that house. Yeah.

Holes smashed in the walls, the toilet's been ripped out and cracked into pieces.

Galarza: Oh my god. Now this isn't typical, which is interesting.

Ryssdal: Oh no, of course.

Galarza: But you're going to get this angle of it too, that this is what happens when, you know. Which is unfortunate, yeah.

Elliot Parker: Well I think most Americans would be surprised at how staggeringly bad it can be.

Elliot Parker is a professor of economics at The University of Nevada at Reno.

Parker: California, for example, has housing prices still are above where they were in 2000. And we are currently about 30 percent below -- adjusting for inflation -- any place we've been since 1975, when we started keeping records. That is, we have never seen housing prices this low in Nevada.

You know what the call that, right? It's a buying opportunity. And that's what keeps Lori Galarza optimistic -- and busy.

Galarza: We are going to go to my listing. I just put it on the market yesterday. It is not a distressed property, it is a seller selling. I'm going to show you, it's a lovely home, we've already got two offers on the house.

Those offers? Not usually from the family moving in from out of town. Investors, Lori says.

Ryssdal: You say investors, other people say speculators.

Galarza: OK. That's interesting. I hadn't heard that.

Ryssdal: Come on.

Galarza: No, I mean, when we are talking to folks. I understand that perspective, but you know, I'm sure there going to be speculators in every type of market.

Not ideal but in a market like this -- a sale's a sale. But when I ask her how she's going to know things are really getting better?

Galarza: We know things will start to stabilize when the locals are buying the majority of homes and not investors. So I'm completely optimistic. Whether it's my nature or whether it's just being here and seeing the interest we have in our city, but we do have a lot of interest in the city and I still see people who want to live here. So, you know, I am one of them.

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.

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