Greenburg, Zack O’Malley. (2009, February 12). America’s Emptiest Cities. Yahoo! Real Estate. http://realestate.yahoo.com/promo/americas-emptiest-cities.html
The purpose of this article was to provide an overview of home ownership and rental vacancy rates in America and compare Las Vegas, Nevada to Detroit, Michigan in terms of property value declines and potential population decrease.
The foreclosure crisis has been responsible for the depopulation of a number of areas throughout the country by now. Home ownership and rental vacancies have both risen overall in America since the collapse of the real estate industry in the country. A number of local markets have been hit even harder by rising vacancies coming on the heels of property value declines.
Vacancy rates in Detroit, Michigan and Las Vegas, Nevada are disturbingly similar at this point in American history. While Detroit has been a relatively empty town for decades as a result of the erosion of the manufacturing and production industries, Las Vegas may be in danger of becoming another metropolitan ghost town due to the housing market bubble.
Devleopment of a new casino has been put on hold as the value of the property has fallen by nearly 50% since the project was begun. Residential building developments have also been put on hold indefinitely. Las Vegas has not experienced the long decline in population of Detroit, which has fallen from peak population numbers by half, but the aftereffects of the collapse and the rising vacancy rates may indicate the beginnings of a long term trend for Sin City.
The collapse of the housing bubble has had the most negative impacts on areas of the country that were highly dependent on a culture of overconsumption, and Las Vegas is the epicenter of the country for wanton spending. With money becoming tighter, Americans saving more, and job losses decreasing the base of consumers, the value of projects like casinos will inevitably drop dramatically. In an area based on gambling money in an era where people are far more protective of their money, the local Vegas economy may be facing a long, slow decline in terms of customers and a local population to support the businesses that were based on the culture of never ending consumption. If this happens, property values for commercial and residential buildings could continue to fall for a long time, while crime rates rise and people find living in other, less exciting areas of the country more attractive.
Is it likely that Las Vegas will turn into the next Detroit, with a population shrinking by half and real estate vacancy rates at high numbers for the foreseeable future? This will depend on the type of American culture that rises from the ashes of the current firestorm in the economy. A nation that focuses on saving money for the future and investing in production may become wealthy enough again to sustain a consumers’ paradise like Las Vegas. However, if the country can not get off the addiction to easy credit and using borrowed Federal Reserve money to finance the illusion of prosperity, Americans can expect to be much poorer in the future. If this turns out to be the case, the extreme level of extravagance of Sin City may become just one more casualty of the boom years.
Further Viewing on a Detroit Neighborhood
No One’s Home: Neighborhood Abandoned
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