With foreclosures soaring and home prices in the tank, Miami and Las Vegas often compete for the dubious distinction of being the nation's hardest hit condo market.
Just a few years ago the two cities shared a reputation as invincible boom towns. Now both real estate markets are climbing out of an abyss of stalled condo developments, spiraling foreclosures and stymied sales.
Trying to figure out which is the biggest real estate loser isn't so easy. But comparing the two markets puts into perspective just how unprecedented Miami's condo explosion was.
"They built less in Las Vegas than in Miami," but there are fewer potential buyers, said Marty Burger, president and chief executive of Artisan Real Estate Ventures in Las Vegas.
Vegas condo owners like Kathy Riggle, a retiree from Tucson, who bought a condo conversion sight unseen for $180,000 during the boom, have watched in disbelief as values have dropped by more than half.
"Will Rogers once said, 'Buy land because they ain't making any more of it.' We got caught up in it like a lot of people," Riggle said.
Her unit, now valued at $49,000, is in foreclosure because she can no longer rent it for enough to cover the mortgage.
Las Vegas analysts and builders blame South Florida developers, as well as other out-of-market players, for helping whip up the condo mania in the nation's gambling mecca.
During the the boom, Miami development companies launched full-scale assaults on the Vegas market — complete with cocktail parties (hosted by gorgeous models) and million-dollar sales centers.
The developers dreamed of expanding their empires on the new Vegas condo frontier.
They figured frequent visitors to Las Vegas from Canada and the mega-population hubs of Southern California would buy second homes rather than continue paying for high-priced hotel rooms.
Faulty assumption, said Richard Lee, a Las Vegas analyst and vice president with First American Title Company.
And here's another false perception the Vegas condo boom was built on: Locals, tired of traffic and long commutes, would seek a more urban lifestyle closer to the action on the Vegas Strip.
"There was no real demand that you could point to," said Jack Winston, a consultant with Goodkin Consulting who cautioned several South Florida developers about their ambitious Las Vegas plans. "The people in Las Vegas, if they want to gamble, they have their own casinos in the suburbs. Permanent residents rarely go down to the strip."
Just as in South Florida — hemmed in by the Everglades and the ocean — the vertical push out West was propelled by the belief that developable land was running out. Although Las Vegas is surrounded by empty desert, much of it is federally owned and off limits to development.
"Outside developers came here and really misjudged this market," said Irwin Molasky, a veteran Las Vegas real estate developer, who also built the 84-unit Park Place condominium that sold out in 2001. "It is not a Miami market. We don't have the South American trade, the New York trade, and they just thought, if you build it, it will come.
"And, unfortunately, they turned out to be wrong." he said.
Read more at MiamiHerald.com