Boomtown bravado aside, next year will be tough for many homeowners

Boomtowns have never been good at accepting bad news, and since statehood Nevada has operated like one big boomtown. It’s the nature of its boosters to deny the undeniable until the last moment.

That is part of what has me intrigued about Gov. Jim Gibbons’ call on Thursday at a Nevada Development Authority breakfast at the Four Seasons for an Oct. 4 economic summit at the Sawyer Building to focus on the very real foreclosure problems inside Nevada’s much-ballyhooed housing market.

It’s easy for an elected official to tick off the long list of sparkling statistics and attractive attributes of Nevada and Las Vegas. Economically speaking, the state and metro area have been among the nation’s leaders in many categories.

It’s quite another thing for a boom-state governor to point to a forbidding trend and make a call to arms.

If Gibbons makes a sincere attempt not only to identify the depth of the foreclosure crisis — that’s something several analysts have already weighed in on — but also to take the steps necessary to help those most hurt by the economic chaos, then it surely will be recorded as a sign of genuine leadership on the governor’s part. Out of adversity comes opportunity — not only for Nevadans feeling a terrible pinch, but for the governor as well.

Stick that in your Gibbons file marked Time Will Tell.

Will the governor bring in banking and mortgage-lending decision-makers capable of helping out residents in dire straits?

Nevada reported 1,470 new foreclosures in August, the highest one-month number in recent history and more than a dozen times higher than August 2006, according to information provided by Applied Analysis.

While some press reports have noted that a large percentage of those foreclosures were for houses held by absentee owners, there’s credible evidence all over the valley that the foreclosure issue is hitting residents hard. The foreclosure totals place Nevada in an unenviable No. 1 position nationally.

Obviously there’s a real problem, but will it have a profound, long-term impact on the community’s economic vitality?

Jeremy Aguero of Applied Analysis is betting that it won’t. Not because the current figures and apparent monthly trends aren’t troubling: They absolutely are.

He remains bullish on Southern Nevada’s future because at least part of that future has already been mapped out and financed: With approximately 40,000 hotel rooms coming on line with the completion of Palazzo, Encore, Fontainebleau, CityCenter, and Echelon, the market simply won’t have an opportunity to decline forever.

Not only will the sagging construction market pick up, but the approximately 200,000 employees who will work in those sparkling new resorts and inter-related occupations will need someplace suitable to call home.

Boomtown bravado aside, the next year figures to be extremely difficult for many Nevada homeowners being gradually eaten alive by adjustable-rate mortgages and the collapse of segments of the subprime-lending market. Aguero says the foreclosure issue is “trending toward the worse side, not getting better,” but he anticipates a positive surge in 2008 when the massive employment call for the new resorts will begin to be answered.

“Really, Southern Nevada is slow only by Southern Nevada standards,” Aguero reminds a skeptic.

Even our 2 percent employment growth (total jobs created) and 5 percent unemployment rate are statistics other regions would envy. But that doesn’t mean today’s crisis hurts homeowners any less.

“Are we seeing some cyclical instability?” he asks. “You bet we are.”

For every 1 percent homes dip in value, Nevada loses approximately $800 million in household wealth, Aguero observes.

But, again, he sees a pattern where others feel the panic. He asks, wasn’t it 18 months ago that affordable housing was the big question?

“It seems to me the debate has turned 180 degrees,” he says.

How much debate will occur at Gov. Gibbons’ Oct. 4 summit remains to be seen, and numbers maven Aguero is likely correct: Over time, our incredible boomtown economic engine will overcome the current foreclosure slump.

That doesn’t mean there won’t be tough decisions in the coming months as more Southern Nevadans face the nightmare of losing the roof over their heads.

John L. Smith’s column appears Sunday, Tuesday, Wednesday and Friday. E-mail him at Smith@reviewjournal.com or call 383-0295.

News Videos
Homeless residents speak about safety
The homeless residents living at the corner of Owens Ave. and Main St. reflect on how they feel about their safety after two homeless men died, one was hit crossing the street and another was beat to death by another homeless man. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
CCSD Superintendent address alleged racially motivated threats at Arbor View
CCSD Superintendent Dr. Jesus F. Jara gives update on alleged racially motivated threats against Arbor View High School, and says such threats will not be tolerated. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Super Bloom Near Lake Elsinore, California
Crowds packed the hills near Lake Elsinore on Saturday to capture a rare selfie amidst the super bloom of poppies turning the landscape purple. The super bloom was caused by the larger rainfall this year. (Todd Prince/Las Vegas Review-Journal)
Fiery accident in Las Vegas
A three-car accident on Spring Mountain Road around 6:30 pm on Monday night
A bipartisan coalition holds simultaneous rallies to promote criminal justice
A bipartisan coalition holds simultaneous rallies to promote criminal justice. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
Stardust implosion anniversary
Twelve years ago today, the Stardust Resort and Casino was imploded. (Mat Luschek/Review-Journal)
Lawsuits filed against security contractors at Nevada National Security Site
Two lawsuits were filed today against the current and former government security contractors for the Nevada National Security Site, one on behalf of Jennifer Glover who alleges sexual discrimination and assault and the other on behalf of Gus Redding who alleges retaliation after he gave statements supporting Glover’s claims. (Rachel Aston/Las Vegas Review-Journal)
New housing option helps Las Vegas moms keep kids while kicking drugs
WestCare Nevada Women and Children’s Campus in Las Vegas has added a new transitional housing wing for women who have completed the inpatient treatment at the behavioral health nonprofit to help them as they go through outpatient treatment, shore up their finances and prepare to secure long-term housing. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Teenager in critical condition after being struck by an SUV in Henderson
Authorities were called about 2:45 p.m. to the scene in the 2100 block of Olympic Avenue, near Green Valley Parkway and Sunset Road. The teenager was taken to University Medical Center in critical condition. (Michael Quine/Las Vegas Review-Journal)
The Water Question Part 3: Conservation loves a crisis
Future growth in the Las Vegas Valley will rest almost entirely on the community’s ability to conserve its finite share of the Colorado River.
The Water Question Part 7: How much can we grow?
Many experts agree that Southern Nevada can continue to grow, so long as residents are willing to do what needs to be done to stretch our crucial resource as far as it will go.
The Water Question Part 6: How many people can Southern Nevada’s water sustain?
The number can swing wildly depending on a host of variables, including the community’s rates of growth, conservation efforts and the severity of drought on the Colorado River.
Mylar Balloon Demo
NV Energy presented a demonstration Wednesday to depict the damage that can be caused by the release of Mylar balloons.
Educators dressed in red have taken to the streets to demand more for their students.
Educators dressed in red have taken to the streets to demand more for their students. Educators from around the State are bringing the Red for Ed movement to the steps of the Nevada Legislature in Carson City, NV, and to the Grant Sawyer Building in Las Vegas. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
Nature Conservancy Ranch
The Nature Conservancy just bought the 900-acre 7J Ranch at the headwaters of the Amargosa River, north of Beatty. The property could become a research station, though ranching will continue.
Swift water rescue at Durango Wash in Las Vegas
On Thursday, February 14, 2019, at approximately 8:42 a.m., the Clark County Fire Department responded to a report of a swift water incident where people were trapped in the Durango wash which is located near 8771 Halcon Ave. Personnel found one person who was trapped in the flood channel. The individual was transported to the hospital in stable condition. Video by Clark County Fire & Rescue.
Flooding at E Cheyenne in N. Las Vegas Blvd.
Quick Weather Around the Strip
Rain hits Las Vegas, but that doesn't stop people from heading out to the Strip. (Mat Luschek/Review-Journal)
Aaron Semas, professional bull rider, talks about his traumatic brain injuries
Aaron Semas, professional bull rider, talks about his traumatic brain injuries. The Cleveland Clinic will begin researching the brains of retired bull riders to understand the impact traumatic brain injuries have on cognition. (Bizuayehu Tesfaye/ Las Vegas Review-Journal) @bizutesfaye
Matt Stutzman shoots arrows with his feet
Matt Stutzman who was born without arms shoots arrows with his feet and hits the bullseye with remarkable accuracy. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
Secretary of Air Force Emphasizes the Importance of Nellis AFB
US Secretary of the Air Force Heather Wilson visited Nellis Air Force Base during Red Flag training and described how important the base is to the military.
Former Northwest Academy student speaks out
Tanner Reynolds, 13, with his mother Angela McDonald, speaks out on his experience as a former student of Northwest Academy in Amargosa Valley, which includes abuse by staff member Caleb Michael Hill. Hill, 29, was arrested Jan. 29 by the Nye County Sheriff’s Office on suspicion of child abuse.
Former Northwest Academy students speak out
Tristan Groom, 15, and his brother Jade Gaastra, 23, speak out on their experiences as former students of Northwest Academy in Amargosa Valley, which includes abuse by staff and excessive medication.
Disruption At Metro PD OIS Presser
A man claiming to be part of the press refused to leave a press conference at Metro police headquarters, Wednesday January 30, 2019. Officers were forced to physically remove the man. (Mat Luschek/Review-Journal)
Clients at Las Vegas’ Homeless Courtyard talk about their experience
Clients at Las Vegas’ Homeless Courtyard talk about their experience after the city began operating around the clock. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
Las Vegas parts ways with operator of homeless courtyard
Jocelyn Bluitt-Fisher discusses the transition between operators of the homeless courtyard in Las Vegas, Thursday Jan. 24, 2019.(Caroline Brehman/Las Vegas Review-Journal)
Las Vegas police and Raiders partner with SafeNest
Las Vegas police and the Raiders partner with SafeNest on Project Safe 417 (the police code for domestic violence is 417). The program partners trained SafeNest volunteer advocates with Metropolitan Police Department officers dispatched to domestic violence calls, allowing advocates to provide immediate crisis advocacy to victims at the scene of those calls. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
North Las Vegas police chief discusses officer-involved shooting
North Las Vegas police chief Pamela Ojeda held a press conference Thursday, Jan. 24, regarding an officer-involved shooting that took place on Jan. 21. The incident resulted in the killing of suspect Horacio Ruiz-Rodriguez. (Mat Luschek/Las Vegas Review-Journal)
Volunteers gather for annual Clark County homeless count
Volunteers gather for the annual Southern Nevada Homeless Census, Tuesday, Jan. 22, 2019. (Chase Stevens/Las Vegas Review-Journal)
Who can understand hospital price lists?
Lists of costs for procedures, drugs and devices are now posted the websites of hospitals to comply with a new federal rule designed to provide additional consumer transparency. Good luck figuring out what they mean.
TOP NEWS
Home Front Page Footer Listing