Excerpts from NAREE Chairman Dion Haynes' Q & A with Las Vegas Review-Journal Reporter and Award-winning NAREE Member Eli Segall Last Spring
Dion Haynes, Washington Post Real Estate Editor; 2018 NAREE President and 2019 Chairman of the Board
As ground zero of the housing crisis, Las Vegas is a laboratory reminding us how far the market can drop but also how a market – and city – can pull itself back up and rise to new heights.
To get more insight on the city, I talked with Eli Segall, a business writer at the Las Vegas Review-Journal specializing in commercial and residential real estate. Eli previously worked at the Las Vegas Sun, AP and at papers in the Silicon Valley. He offers us compelling reasons why the Las Vegas story is so important now. He details the enormous emotional and economic trauma the city has suffered and how those lessons can benefit us both professionally and personally.
Q: As we all know Las Vegas was ground zero for the housing bubble and crash that took down the economy, and it's fitting for us to come 10 years later to explore those issues and gauge how far we've come. Can you remind us how bad things got in Las Vegas?
A: You can't overstate how terrible it was. No matter how you measure it - unemployment, foreclosures, bankruptcies, underwater mortgages – however bad it got in other cities, it was almost certainly a lot worse here.
The local economy had stopped spiraling by the time I moved here in 2012. But construction was basically at a standstill, and zombie projects from the bubble years – unfinished hotels, abandoned condo buildings, partially built subdivisions – were all around town.
Q: Las Vegas certainly has come a long way – as you've recently reported the city ranked No. 2 nationwide behind Seattle in terms of price growth in 2017 and commercial and residential construction is roaring back. But some have been expressing concerns about another bubble. Tell us about some of the exciting things happening in the city and if you think the concerns are overblown.
A: Construction has definitely picked up, especially for single- family homes, apartment complexes and industrial buildings. Some big projects are planned or underway, including the Oakland Raiders' new stadium and the expected completion of the Fontainebleau, a hotel tower that was abandoned during the recession and has sat unfinished ever since.
People here often wonder if another housing bubble is coming or whether we're in one now. It's a reasonable concern, given how crazy things got last time and how badly it all ended. You can easily argue that prices are inflated now, but I'm not seeing signs that we're in an all encompassing bubble, at least not yet.
Q: The latest problems plaguing housing markets across the country are lack of inventory and lack of affordable housing. How are they playing out in Las Vegas?
A: Inventory has plunged, and there is a shortage of affordable housing for low-income residents. But overall, it's still a lot cheaper to live here than in, say, Seattle or the Bay Area. I grew up near San Jose, California, and out there, prices have reached crisis levels and people are moving away because it's so expensive. That's not the case here. Las Vegas' population is growing, and I don't hear about people leaving town or putting up with an hour- plus commute because they can't afford anything here.
Q: As housing journalists and experts seek to understand what makes a healthy and unhealthy housing market, what lessons can we learn from Las Vegas's experience?
A: 1. Don't treat your house like an ATM.
2. If you've never worked a day in real estate but suddenly want to flip houses or develop a project, take a deep breath and tell yourself that, no matter how smart you might be, you have no idea what you're doing.
3. When a neighbor sells his/her house for 30 percent more than another neighbor did a few months earlier, don't get excited. Be very, very afraid.
Editor's Note: NAREE's 2018 real estate journalism conference was held in Las Vegas June 13-16. NAREE members return to Las Vegas in Feb. of 2019 to cover the International Builders Show. NAREE held many panels on housing at our 2018 stand alone conference in Las Vegas and will do so again at our Austin conference, June 26-29 at the Hyatt Regency. Meanwhile during NAREE's return visit to Las Vegas Feb.19 we'll gather for a reception in the Wheel House room before riding the High Roller 550 feet above the Las Vegas Strip. Afterward we'll meet for food and drinks at the NAREE Hospitality Suite at the Nobu Hotel at Caesars Palace, which is across the street from the High Roller.
Kudos to NAREE member Eli Segall for all of his hard work on the 2018 conference.