Gambling Capital Is Flush With Empty Houses

He said he knew the market had gotten out of whack when, one day at an off-Strip casino catering to local residents, a valet told him he was selling one of his houses -- just one of them -- for $1.2 million.

The boom sucked in a lot of ordinary people who normally may have been more cautious with their money. Las Vegas had always been a place with cheap housing, a town where a construction worker or a hairstylist could afford a decent home. But as the prices soared, people worried that the market would leave them behind forever. Some people of modest means took out whopper loans, 100 percent interest, with a "teaser rate" of, say, 3.9 percent that would adjust upward in a couple of years. Surely, they figured, they'd be able to refinance as the value of their house rose.

In 2004, housing prices rocketed 52 percent in just 12 months, and builders couldn't slap houses together fast enough.

"We couldn't get a sign in the ground before these properties were sold," Cooper said.

Las Vegas homes have a signature look, a desert theme: tile roofs, stucco walls, and a tiny garden or patio. Houses are separated from one another by a block wall. Indeed the neighborhood is almost invariably a walled compound, with limited entrances. Wood can't last in the desert, so concrete is king.

Now empty homes in some neighborhoods are watched by security cameras, because thieves will rip out copper pipes, appliances, anything that might fetch a price on the black market.

In Mountain's Edge, a sign looms over a vast expanse of gravel, mounds of rocks, an unused street and some low walls, almost like a three-dimensional blueprint of a neighborhood yet to be built. Or maybe like an archaeological ruin. "Trissino," the sign says, is coming soon: "Interest List Now Forming." But at midday on a Tuesday there were no construction crews, nor any hint that this economy needed yet another neighborhood.

Rod Gumke, 62, drove up in his pickup truck, pulled over to the shoulder and nabbed a flattened, battered-looking orange construction cone. Gumke pours concrete, but his industry has half the work today that it did a couple of years ago, he said.

"The market is flooded with resales," he said. He threw the beaten-up construction cone into the back of his pickup.

"I can't afford a new one. Trying to save money. They're $50 apiece."

Casinos to the Rescue

This desert metropolis has a knack for doing things big, of upping the ante, going all-in. The good times are great, the bad times calamitous. This place is like a vast experiment in unbridled capitalism.

There is hope on the horizon, in the form of luxury casinos rising on the Strip. The largest project, CityCenter, is a $9 billion venture that includes residential and commercial space as well as hotel rooms and casinos. Casino tycoon Steve Wynn will open Encore, another luxury hotel on the Strip, in a couple of months. These projects and others will create 130,000 new jobs by 2012, Aguero predicted.

More gambling and more people have always been the strategy for success here. Said Cooper: "People have lost a lot of money betting against Las Vegas."