Southern Nevada should learn from a past housing fiasco in California

As the U.S. Treasury, according to the recently approved rescue plan, prepares to buy distressed real estate assets to help the faltering financial and mortgage sectors get back on their feet, a real danger lurks in the shadows for Las Vegas. And other communities across the land. The example of what happened in California about 20 years ago will shed light on how the state's agony was prolonged for years.

That time the federal government's Resolution Trust Corporation was tasked with fixing the savings-and-loan meltdown, many still remember that, and it went ahead and executed an aggressive sales program of troubled real estate units wherever they were in California. To timely move the unwanted inventory prices were lowered and as a result sales were brisk. But the buyers were mostly investors who often flipped the properties for a quick profit. Ultimately a host of these homes became rentals and that further depressed property values in untold communities. To quickly solve the problem the RTC simply dumped real estate on the market without much concern for how it would play out in the long run.

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