Jon

There's a Newsweek article that's not as optimistic as the previous posters called, "Down on Its Luck: Las Vegas used to be a recession-proof oasis. Not anymore." http://www.newsweek.com/id/135638

Quotes from the article:
"According to the Las Vegas Convention and Visitors Authority (LVCVA), Las Vegas has seen gambling revenues fall only once since 1970: in the aftermath of the Sept. 11 terror attacks they dropped 1 percent in 2002 from 2001. So far this year they've fallen 4 percent, the number of conventions held has dropped 10.4 percent, and average daily room rates were off 3.8 percent in the first two months of 2008, according to the most recent data available."

"Nearly 7 percent fewer cars crossed the Nevada-California border along Interstate 15 through February..."

"...while construction continues on the half-built $3 billion Cosmopolitan Resort and Casino next to the Bellagio, the project may be in jeopardy after developer Bruce Eichner's company defaulted on a $760 million loan from Deutsche Bank." - Wed May 7 2008, 07:48

Wow, Yev's post is the first right on comment I've seen on Trulia since the bubble burst!

Marites, ordinarily I'd agree with Ann's post as sound advice. However, because of some new factors in the market you will have to weigh this decision for yourself. First of all you need to realize that real estate agents are just sales people and you wouldn't go to a used car sales person to get advice about the future of the auto market nor should you seek out real estate agents for the direction of the housing market.

First, know that maybe the 1st inning of the housing bust will end by the end of 2008. You're really going to see the value of houses fall off by 2009. I wouldn't even think of buying a house for a few years. You're going to see prices drop by at least 50% of what they were before the bust. Look for prices as they were in 2000 or earlier before you start to make a move.

Next you need to understand what caused the bubble burst. The Federal Reserve caused it by dumping too much money into the market in the form of low interest rates. They did this to help the stock market recover from the tech bubble which has caused the U.S. dollar to devalue by about 50% in the last 5+ years. Now we see the Fed once again dropping rates to almost the rate of Japan's interest rates and commodities of course sky rocketing (to the point that there are food riots in some part of the world). You may wonder what will be the next bubble if this technique even succeeds this time around. But wait...there are other factors at stake.

You may have noticed that the Fed has attempted other means to try to pump liquidity into the market this time around, and even President Bush is handing out free money (tax rebates). Understand this means they'll be borrowing more money from countries like China in order to do this which means the dollar will continue to lose value. Sounds crazy, right? You have to understand that people in high places are freaking out because the housing bust is threatening to trigger the bust of something even larger...an investment product known as Credit Derivative Swaps (CDS). I won't go into what a CDS is here but know that the risks of housing mortgages as well as any other market are tied up in these experimental things. Yes I did say experimental; you see, they haven't been around all that long but the global market is entirely tied up in these things with a supposed value of around $500 TRILLION, yes with a "T". That's more than the value of everything in all the markets and far more than the U.S. or even the world's entire GDP. How can they be worth more? They're basically bets about risk and a lot are worthless because the risk calculations were wrong which is why we see the Fed helping J.P. Morgan/Chase buy up Bear Stearns (with our tax dollars to cover the "investments" gone bad which is really more money borrowing). The housing bust threatens to expose them all, and if that happens, we'll see a worldwide depression; yes, the "D" word!

Another factor is that the U.S. Federal Government is now incurring another TRILLION dollars in debt every 15 months! So expect the U.S. dollar to continue to fall at a rate that also increases (exponential fall). What happens when all the baby boomers retire and strain the non-existent Social Security Trust and puts more demands on Medicare? That sends us into $50 TRILLION of promised future debt. How do we pay it? Borrow more money from China, Japan and S. Korea? These countries have already expressed official concern over the past few years because the value of the dollar has fallen so much. They're looking to park their money elsewhere. So how will our government continue to make good on promised money when the markets lose faith? What happens when they can't even pay the interest payments on their debt which is coming soon. Do they start confiscating property or converting National Parks into whole sale auctions to the world?

Now you also have to consider that the U.S. Commerce Dept. has been facilitating the rapid export of our manufacturing base to China and at our labor wages there's no way we could imagine to compete with them, so basically we can produce less and less wealth. Their argument is that we are now a services economy. However, countries around the world have been positioning themselves to gobble up a share of the services market like India and China for engineering and science and the U.A.E. for the financial sector. So you have to ask yourself where is all the wealth going to come from to make the housing market as valuable as it once was. Sure there will be pockets here and there with an unprecedented divide between the well off and an expanding sector of run down neighborhoods (just like the third world already has).

Yes, it's complex to know what the future holds under these circumstances, but the last person I'd ask is a sales person. - Thu May 1 2008, 06:09