In 2007, when Dominic Magliarditi bought a Las Vegas property, it cost him $30.2 million. Just four years later, that same property would be sold for a song, at the low low price of $4.4 million.
When Magliarditi was forced to foreclose on his property to National City Bank, the bank promptly sold the property for the bargain price of $4.4 million to Lightstone Acquisitions, Vegas Inc. reports. That equals a four-year decline of approximately 85 percent.
In 2005, just before the peak of the U.S. housing market, few would have imagined such a dramatic decline in any real estate holding. But since the market began its free-fall, and with prices now declining for 57 months straight, there seems to be little chance of that soon turning around. During just the first quarter of 2011, for instance, housing prices fell by 4.1 percent, according to Standard & Poor's/Case-Shiller Home Price Indices.
Las Vegas, and the Nevada area more generally, have been hit especially hard by the housing collapse. Just under 13 percent of Nevada homes were in "serious delinquency" in the final quarter of last year, more than twice the national average, reports the Las Vegas Review-Journal. And just in the year leading up to March 2010, real estate prices in Las Vegas fell by 5.3 percent alone.
An increasing number of homeowners find that what they thought were their safe mortgages are underwater, meaning that they owe more on their mortgages than what their home is actually worth. The increasing number of foreclosures, which help drive down surrounding property values, is only exacerbating the problem.
That, in turn, has added to foreclosure crisis that has created a mass inventory of empty homes in the United States. By May 2011, close to 13 percent of all homes in the U.S. were vacant, according to the Census Bureau
But now that the market is bust, Nevadans are having to deal with an entirely new economic reality. "There's virtually no construction in the valley," said John Stater of Colliers International.
Indeed, with the state's housing and construction industries going bust, the state has one of the highest unemployment rates in the country at 11.9 percent., according to the Bureau of Labor Statistics. Nevada's unemployment rate has not been in the single digits since December 2008.