News talk 2013-12-23: Detroit broke — Vegas next?

Las Vegas is overbuilt. I said so over a decade ago and predicted that casinos would fold. I also predicted the housing collapse there.

So, am I happy that I’m right. No, sad, actually. Too much competition threatens gambling in cities where too many casinos with too many hotel rooms were hastily added. And what about real estate values in Las Vegas? I argued for decades that the skyrocketing prices would collapse — and it had nothing to do with gambling. It had to do with people cashing out from the housing bubble in California and elsewhere and moving to Las Vegas — where prices were ridiculously cheap at first. Then only comparatively cheap. Then not cheap at all.

That onslaught pushed home prices way up and people thought they would just keep climbing. But I argued that they couldn’t, because after the first wave of buyers, who were you going to sell to next?

Unfortunately, even more factors have piled on to push home prices down. And the casino industry is in deep trouble, despite PR efforts to say it ain’t so. Now real estate is starting to recover a bit. But high-priced Vegas, ever expanding, is probably permanently a thing of the past. — MC