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May 25, 2015

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The economy:

How 5 homes have fared on the real estate roller coaster

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Chris Morris

If there’s a single property in the Las Vegas Valley that typifies the extremes of the housing boom and bust, it may be this little house for sale on Walcott Drive.

It sits on one-tenth of an acre in the southwest valley and looks a bit like the shotgun homes of New Orleans, without the charm. Its 975 square feet includes two bedrooms and two bathrooms.

It can be yours for $64,900.

By contrast, a 2012 Cadillac Escalade starts at $63,170.

If only our little house on Walcott had wheels.

A 30-year loan at 4 percent with no money down would mean a monthly payment of about $310, and the homeowners’ association fee amounts to about $6.50 a month.

Now do you see why our residential construction industry is dead? Where else can you get such a deal?

Cleveland, maybe.

What’s just as shocking as this incredible steal of a price is the property’s history.

In 2002, it sold for $136,341. In 2007, it went for $223,000. Pretty steep. More like California real estate.

An uncomfortable fact of the housing boom and bust is that there are people on both ends of these transactions. For every person who got burned by buying in 2005 or 2006 or 2007, someone made a tidy haul by selling during those years. Hopefully for them, they didn’t throw their money into the black hole that has become the Las Vegas real estate market.

We set out to find homes that have been emblematic of these times — middle-class homes built during the boom and then bought and sold at the top and bottom of the market. We also tried to contact current and past owners to hear their stories. We didn’t have much luck, as just a few people were willing to talk to us, but of course by now we’ve all lived or heard the stories. To preserve privacy, we’re not giving addresses, and several people asked that their names not be used.

We don’t mean to minimize the scale of the Hurricane Katrina disaster, but you might say Las Vegas has suffered its own Category 5, although rather than an Act of God natural disaster, ours was pure human folly, and there’s no telling when we’ll recover.

    • Real Estate Bubble
      Photo by Rebecca Clifford-Cruz

      Sagewood in Henderson

      We start in a new development in old Henderson called Sagewood. The owner is Brian Lenze, who bought it in June 2009 for $155,000. He’s probably lost some value, but he still feels OK about his purchase. The house sold for $188,356 in 2004, and then in October 2006 it sold for $315,000.

      “It could have been a lot worse,” Lenze says. “It has gone down a little, but I still feel like one of the lucky ones. So many people have been devastated by the situation and I was able to take advantage” of the low prices, Lenze says.

      Not surprising: The home is stucco and has a red tile roof.

      He’s a young science teacher at Coronado High School. Another sign of our troubles: Ordinarily he would be teaching Advanced Placement classes, which enable students to earn college credit. But with class sizes so large this year, the school couldn’t justify having the smaller classes.

      On the up side, he says his students so far this year are excellent. An education is the only way, kids.

    • Real Estate Bubble
      Photo by Rebecca Clifford-Cruz

      The Villas at Tropicana

      Next up, we’re in The Villas at Tropicana on the east side of town. The owner is a California investor with several properties, some bought during the boom and others during the recession. The owner tells me she and her husband came here for leisure and like Las Vegas.

      The house sold for $146,173 in 2003 and then for $235,000 in March 2007. That owner foreclosed. The current owner bought it for $87,900 in June of last year. They rent the place, which is near Whitney Elementary School, which, unfortunately, is an architectural embarrassment resembling a county jail and should be torn down.

      The neighborhood has some nice desert shrubbery and some trees, but no sidewalks.

    • Real Estate Bubble
      Photo by Rebecca Clifford-Cruz

      The Parks in North Las Vegas

      Now we’re way up north, near Centennial High School in a development called The Parks, which is — surprisingly — aptly named. The development does indeed boast a number of little pocket parks. We’re not talking Frederick Law Olmsted here, but credit to the developer for building these spaces.

      The thoroughfare nearby runs right into the empty desert. The leapfrog development in the area — meaning neighborhoods surrounded by empty desert lots — is an indication of the poor planning of North Las Vegas, though obviously it’s a valleywide phenomenon.

      Our valley was planned, it seems, by developers. And guess what? They didn’t have our interests at heart.

      The house sold in 2004 for $247,000 and then for $324,900 in August 2006 — great time to sell.

      The current owner bought the house in April 2009 for $144,000.

      The street is far too wide and the sidewalk can’t be much more than two feet across. This will discourage people from walking, which will discourage them from getting to know their neighbors.

      The neighborhood is replete with for-sale signs, perhaps seven of them, plus an eviction notice indicating foreclosure is coming.

    • Real Estate Bubble
      Photo by Rebecca Clifford-Cruz

      Shady Pines near 95 & Durango Drive

      Now we’re at another investor-owned home on Shady Pines, near U.S. Highway 95 and Durango Drive. There are two for-sale signs within shouting distance.

      The owners, Bill and Lillian Higa, bought it for $140,000 last December. It sold for $153,630 in 2000 and then for $374,500 in 2005. Ouch.

      The Higas, who are retired, grew weary of the fluctuations in the stock market, so they’ve invested in several properties in the valley. They use the rental income like an annuity. They say they’ve had good luck with their tenants.

      Unlike many investors, the Higas live here, and they love it. The casinos provide a lot of entertainment, and they enjoy the restaurants.

      Our people are nice, the Higas say. Even the taxi drivers and made them feel welcome when they moved here in 2003.

      So that’s a feather in our collective caps.

    • Real Estate Bubble
      Photo by Rebecca Clifford-Cruz

      Walcott Drive in the Southwest

      Here we are, back at the little place on Walcott.

      What’s particularly significant and revealing is this property’s proximity to a high-density apartment area. Rents for a two-bedroom, two-bathroom apartment with similar square footage range from $700 to $895. Compare that to the monthly mortgage payment of $310, and it’s clear that for this property at least, it’s time to buy.

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