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Repossession capital of the US
By Jon Bithrey
Business reporter, BBC News, Las Vegas
Rising majestically out of the desert sands of Nevada, the lights and lure of Las Vegas are legendary.
Its casino resorts attract tens of millions of visitors each year, eager to explore the self-styled Entertainment Capital of the World.
But the city has also become notorious in the US as one of the places hardest hit by the housing crisis and recession.
Job losses
House prices here have fallen by almost a third in the last year alone.
The number of foreclosures, or repossessions, is the highest of any large city in the United States.
And unemployment stands at 13.1%, well above the national average.
Ed Leigh lost his job as a chef at one of Las Vegas' casino restaurants in January.
His home was repossessed shortly afterwards, and he found himself homeless.
"Until about a year ago the food industry was vibrant," he says.
"Now it's really lacking. The job market just crashed. There's just nothing out there."
He says that six years serving in the US army helped him get through his period on the streets.
"We were taught basic survival skills. Find a place to make a camp, find a few people to hang out with, somebody you can trust. [You] just try and protect yourself."
Boom and bust
He is now being supported by Catholic Charities of Southern Nevada, a major provider of services to the homeless and unemployed.
Its director of residential services, Philip Hollon, says the impact of the recession in Las Vegas is amplified by its reliance on casinos and tourism.
"If you're a valet driver in Vegas and you park cars, now that people aren't actually visiting the city you don't have the cars to park."
He adds that many workers who until recently have had secure employment at the casinos don't have skills that are easy to take to other industries.
For most of the past two decades, Las Vegas has been a boom town.
The early 1990s saw a resurgence in investment in new casinos, and a renewed desire to build and market the city as much more than a glorified gambling den.
Visitor numbers shot up and the resorts took on more workers. Many flocked from other states, driving a property boom on cheap, plentiful land.
That was amplified - as elsewhere - by the availability of cheap loans, including more sub-prime mortgages, extended to people with poor credit ratings.
Financial crisis
So when prices eventually began to turn, Las Vegas suffered disproportionately.
“ People are coming in and selling everything. Their jewellery, tools, televisions, pretty much anything that pawn shops deal in [including guns] ”
Glenn Parshall, Pawn shop manager
Prices hit a record high in August 2006. Since then, they've fallen by 54.3%.
And although house prices in many other parts of the United States have begun bottoming out, they are still falling relatively quickly in Vegas.
The height of the financial crisis in September 2008 exacerbated the problems.
All the big casino groups reported an immediate fall in visitors, with people apparently staying away because of fears about the future.
Those who did still come didn't spend as much.
"Right in the middle of September we started to experience a 20% decline in revenue," says Gary Loveman, chairman and chief executive of Harrah's, which owns Caesar's Palace and several other casinos on the world famous Strip.
"It's memorialised in my mind. I thought 'holy cow, what the heck's happened'. From that point on it got really ugly."
Hope for the future
Falling revenues - particularly from the previously lucrative convention business - have pushed casino groups into cutting thousands of jobs.
They've also halted work on some new construction projects, depressing the local property market still further.
However as you might expect in a gambling city, there is the occasional winner.
"People are coming in and selling everything," says Glenn Parshall, manager of a pawn shop on the northern side of Vegas.
"Their jewellery, tools, televisions, pretty much anything that pawn shops deal in."
When asked if business is good, he replies candidly. "Business is very good. We're getting a lot more people in. It's been continuous growth".
Glenn isn't the only one with some optimism about the future.
Janice Birch lost her costume jewellery business when recession struck, as well as a property she bought as an investment. But she's not giving up because she thinks there's always someone worse off.
"Just like my grandma used to tell me, you complain about having no shoes, there's somebody out there with no feet," she says.
"You don't complain, and you be prepared and ready when opportunity comes.
"You have to make sure you have the right attitude. A positive attitude."
You can hear more about the state of economy in Las Vegas on Business Daily on the BBC World Service on Monday 7 September.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/h...ss/8237955.stm
Published: 2009/09/07 23:27:17 GMT
© BBC MMIX
By Jon Bithrey
Business reporter, BBC News, Las Vegas
Rising majestically out of the desert sands of Nevada, the lights and lure of Las Vegas are legendary.
Its casino resorts attract tens of millions of visitors each year, eager to explore the self-styled Entertainment Capital of the World.
But the city has also become notorious in the US as one of the places hardest hit by the housing crisis and recession.
Job losses
House prices here have fallen by almost a third in the last year alone.
The number of foreclosures, or repossessions, is the highest of any large city in the United States.
And unemployment stands at 13.1%, well above the national average.
Ed Leigh lost his job as a chef at one of Las Vegas' casino restaurants in January.
His home was repossessed shortly afterwards, and he found himself homeless.
"Until about a year ago the food industry was vibrant," he says.
"Now it's really lacking. The job market just crashed. There's just nothing out there."
He says that six years serving in the US army helped him get through his period on the streets.
"We were taught basic survival skills. Find a place to make a camp, find a few people to hang out with, somebody you can trust. [You] just try and protect yourself."
Boom and bust
He is now being supported by Catholic Charities of Southern Nevada, a major provider of services to the homeless and unemployed.
Its director of residential services, Philip Hollon, says the impact of the recession in Las Vegas is amplified by its reliance on casinos and tourism.
"If you're a valet driver in Vegas and you park cars, now that people aren't actually visiting the city you don't have the cars to park."
He adds that many workers who until recently have had secure employment at the casinos don't have skills that are easy to take to other industries.
For most of the past two decades, Las Vegas has been a boom town.
The early 1990s saw a resurgence in investment in new casinos, and a renewed desire to build and market the city as much more than a glorified gambling den.
Visitor numbers shot up and the resorts took on more workers. Many flocked from other states, driving a property boom on cheap, plentiful land.
That was amplified - as elsewhere - by the availability of cheap loans, including more sub-prime mortgages, extended to people with poor credit ratings.
Financial crisis
So when prices eventually began to turn, Las Vegas suffered disproportionately.
“ People are coming in and selling everything. Their jewellery, tools, televisions, pretty much anything that pawn shops deal in [including guns] ”
Glenn Parshall, Pawn shop manager
Prices hit a record high in August 2006. Since then, they've fallen by 54.3%.
And although house prices in many other parts of the United States have begun bottoming out, they are still falling relatively quickly in Vegas.
The height of the financial crisis in September 2008 exacerbated the problems.
All the big casino groups reported an immediate fall in visitors, with people apparently staying away because of fears about the future.
Those who did still come didn't spend as much.
"Right in the middle of September we started to experience a 20% decline in revenue," says Gary Loveman, chairman and chief executive of Harrah's, which owns Caesar's Palace and several other casinos on the world famous Strip.
"It's memorialised in my mind. I thought 'holy cow, what the heck's happened'. From that point on it got really ugly."
Hope for the future
Falling revenues - particularly from the previously lucrative convention business - have pushed casino groups into cutting thousands of jobs.
They've also halted work on some new construction projects, depressing the local property market still further.
However as you might expect in a gambling city, there is the occasional winner.
"People are coming in and selling everything," says Glenn Parshall, manager of a pawn shop on the northern side of Vegas.
"Their jewellery, tools, televisions, pretty much anything that pawn shops deal in."
When asked if business is good, he replies candidly. "Business is very good. We're getting a lot more people in. It's been continuous growth".
Glenn isn't the only one with some optimism about the future.
Janice Birch lost her costume jewellery business when recession struck, as well as a property she bought as an investment. But she's not giving up because she thinks there's always someone worse off.
"Just like my grandma used to tell me, you complain about having no shoes, there's somebody out there with no feet," she says.
"You don't complain, and you be prepared and ready when opportunity comes.
"You have to make sure you have the right attitude. A positive attitude."
You can hear more about the state of economy in Las Vegas on Business Daily on the BBC World Service on Monday 7 September.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/h...ss/8237955.stm
Published: 2009/09/07 23:27:17 GMT
© BBC MMIX