Las Vegas a casualty of the housing bust
(CBS News) TAMPA, Fla. - A big issue facing the presidential candidates is the housing slump. We've been seeing some glimmers of a turnaround recently: A report Tuesday said that home prices in June were half a percent higher than in June of 2011. That's the first year-over-year increase in nearly two years.
Still, a lot of Americans are struggling to hold on to their homes are worth, including in Nevada, a battleground state. Even now, two-thirds of Las Vegas homeowners are underwater, leaving many of them angry and frustrated.
Dave and Cheryl Burton worked hard to buy their north Las Vegas dream house in 2007, the perfect place to raise their children, Max and Chase.
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"As soon as we moved in, the market tanked," said Dave.
The house they bought for $700,000 now is valued at $325,000.
"When the market tanked," said Dave, "our mindset was keep working hard, put your nose to the grindstone, and it will turn around. Well, here we are five years later, and the end is not in sight."
They can't refinance, because they're underwater and their bank won't consider reducing their $680,000 loan. Asked if he is paying that large sum for a house that will never be worth that, Dave said, "You are exactly right. Seems kind of foolish, doesn't it?"
During the boom years, Las Vegas kept spreading into the desert -- a gambling town betting that it would keep growing and prices would keep rising. Like cities across the country, Las Vegas lost that bet. Home prices have dropped more than 61 percent from the peak 2006.
President Barack Obama's federal mortgage relief programs have helped 3.4 million homeowners with government-backed mortgages to refinance. He wants to expand that to 3.5 million more homeowners with mortgages guaranteed by private banks.
"If you are ineligible for refinancing just because you are underwater on your mortgage, through no fault of your own, this plan changes that," Mr. Obama said in February.
It will cost the government $4 billion to back the refinanced mortgages. That has met stiff resistance in Congress.
Gov. Mitt Romney advocates a different approach: Get government out of the way and let the market work. As he told the Las Vegas Review Journal last year: "Don't try and stop the foreclosure process. Let it run its course and hit the bottom, allowing investors to buy homes, put renters in them."
When we asked the Romney campaign for more details, they directed us to another statement from a speech last month.
"The best thing I can do is get people good jobs with rising incomes, so we can buy homes again," Romney said to a crowd.
Time has healed markets in Austin, Houston and Washington D.C. But it's going to be years, if ever, for homes in Las Vegas recover their value. The Burtons said they don't know who to vote for in November.
"We have done everything right, stellar credit, work hard," said Dave. "Where is our bailout? Once again, we as Americans are forced to vote for the person who is going to do least amount of damage. "
Government help or no government help -- when it comes to the housing crisis, voters have a clear choice. But as the Burtons know, it's not an easy one.
