There were great fortunes made in Las Vegas during the speculative run up from 2002–2005, but now the remnants of the party are chocking the city. Cruising through the communities will find speculative holes in the landscape full of dying subdivisions. Empty homes with dead lawns litter the landscape as other homeowners fret as their homevalues threaten to implode until these homes are filled.

This is the hangover that the speculators have left in Las Vegas. Other pocket in Florida and Arizona are working through the same phenomena, but it looks like Vegas is the epicenter of the speculative rampage. What is ironic is that fortunes were made during the run up and fortunes will be lost in the collapse.

The real interesting feature from an academic perspective will be at what point the empty homes fill and what will cause it. With half the homes on the market empty, is this putting downward pressure on rents in Las Vegas? Will there be a surge in home sales when a certain price point is hit? And what will the banks that are holding some of the foreclosed properties do with them? Will they capitulate and have a fire sale or will they remain strong in the market?

Time will tell but it will be interesting watching how Las Vegas real estate unfolds over the coming years.

Those who failed to cash out ahead of the bust have left owner-occupants such as Lewis stranded in a lonely landscape. Almost half of the 30,000 homes listed for sale in the Las Vegas metropolitan area stand vacant, said Nason, making it that much tougher to sell the rest.

“It’s kind of a downward spiral,” he said. “In the next year or two, it could get a heckuva lot worse.” via chicagotribune.com.

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1. Case Shiller March 2009 Numbers – Las Vegas and Phoenix Down 50 Percent
2. One in Nine Homes Are Vacant in the United States
3. Zombie Subdivisions – The Living Dead of the Real Estate Market
4. Tough Times For Retailers – And Shopping Center Owners