According to this article, more than two-thirds of the homeowners in the Las Vegas metropolitan area owe more on their mortgages than the houses are worth. That statistic is hard to believe, and tells you as much about the quality and credit analysis of the bankers in Las Vegas as it does about the homeowners. In any case, it will no doubt take years for the housing market in Las Vegas to recover.
The chart of the ten cities in the U.S. with highest percentage of homes with “negative equity” also tells you a lot about where the housing bubble was the biggest and flimsiest — California, Nevada, Florida, and Arizona. Expect the elected representatives from those areas to push hard for some kind of long-term legislative relief for the risk-taking bankers and homeowners who helped to make that bubble grow in the first place.