Out of Luck? Sluggish Vegas Tries to Rebound

Foreclosure Crisis 'Very Severe'

Throughout the last 10 years, every acre of the strip has been developed.

The City Center -- one of the largest construction projects in the world -- began in the boom year 2005. But costs have risen from $4 billion to $11 billion, and when the funding for the project ultimately dried up, the city needed bailout funds from Dubai.

And this is nothing when compared to the real estate market overall. Twice a week, Barbara Zucker takes potential buyers on a tour of foreclosed properties, and "Nightline" took a trip on her Las Vegas Foreclosure Express.

Nevada has the highest number of foreclosed homes in the country.

"It's very severe," said Zucker. "It's freefall for everyone, for lenders, the agents, the homeowners -- there are no knowns anymore."

All the houses seem the same: recently built, once proudly owned, now taken back by the bank.

Maloof is encountering his own problems with the property market. He's just completed a tower of condos that he hopes to fill in January.

"Well, we've had a lot of closings," said Maloof. "We have about 10 percent that haven't closed, that we took back their units. But we still have a small portion that is waiting to close."

Maloof is also fighting hard to sell his existing product, the Palms Hotel. In an effort to beat fierce competition, Maloof has introduced one-of-a-kind facilities to the most expensive rooms, including a spinning bed.

Ideas like this may be a humorous diversion, but Maloof admits the economic crisis has affected his sleep.

When you're in the service business, you always worry the next day that no one's going to show up," he said. "I've never been a big sleeper as it is."

He wants all casino owners to pull together for the good of the city.

"We want everyone to do well," he said. "We want the new places opening up to do well. Traditionally, that's what happened in Las Vegas. We want new casinos; we want to hire more people. We need those things."

Back at the Speedway Casino -- with its $3.99 steak and shrimp -- business is still sluggish.

"I have confidence that the market will come back," said Schorr. "I can't tell you when. I don't know if it'll be six months, nine months or two years. But we've been able to get lean enough that we can survive at least two years in today's economy."

For now, the city of Las Vegas is holding its breath, praying that the sins of the past will be forgiven and the good times will soon return.

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