Leslie Carver vividly recalls the moment she realized something was amiss in America’s housing market. In June 2006, after nearly 30 years as a real estate agent in the Las Vegas Valley, she noticed a drastic change: the once-booming market, where people camped out for days before housing projects went on sale and multiple offers were the norm, came to an abrupt halt.

“Suddenly, we weren’t getting multiple offers, and suddenly, we weren’t even showing, so I was like, ‘What happened?’” she recalled. Carver remembers this period well because she was interviewed by Money magazine that same month. “They wanted to talk about how great the Las Vegas market was,” she said. “I had to be honest and told them our market had slowed down. I had several listings, but it seemed like it had dried up a bit.” The article ended up stating, “According to Leslie Carver, the Las Vegas real estate market has dried up like a desert,” which led her to question, “Oh my God, why?”

Carver faced criticism from colleagues and fellow agents over the article, but her insights proved to be prophetic. The Las Vegas Review-Journal spoke with about half a dozen veteran real estate analysts, brokers, and agents about their experiences during the 2008-09 Great Recession and the lessons learned from the financial crises. Many noted similarities between the real estate market in 2024 and the prelude to 2008, though they remain uncertain about the future due to the current economy’s complexity.

In 2007, the entire U.S. real estate market plummeted to unprecedented lows. This collapse was driven by lax mortgage lending rules, which caused the value of mortgage-backed securities to crash. The resulting Great Recession was the worst financial crisis since the 1930s’ Great Depression. Millions of Americans lost their homes, and Leslie Carver, who was heavily involved in short sales and foreclosures due to her banking connections, witnessed many families enduring severe hardships.

“No one had money to do anything,” she recalled. Families turned to her for help, hoping to avoid foreclosure by selling their homes and breaking even. “It was a very difficult time for a lot of families just figuring out how to at least move on and not have a foreclosure looming over them.”

According to data provided to the Las Vegas Review-Journal by Las Vegas Realtors, 2007 was the worst year for home sales, with only 18,555 homes sold. In comparison, the average annual home sales in the valley from 2000 to 2023 was about 36,936, with 2021 setting a record with 50,010 homes sold.

Forrest Barbee, a real estate agent in the valley recently appointed to the Nevada Real Estate Commission by Gov. Joe Lombardo, described the period as one where everyone in the industry questioned their career choices. “You always start out in denial. ‘Ah, this will be OK.’ Well, it wasn’t for about five years,” he said. Companies downsized, and employees took on multiple roles, often with pay cuts. The collapse of the mortgage lending industry and massive banking failures underscored the crisis’s severity. Even those who had saved for tough times struggled to endure the market’s drastic downturn.

“If you work in sales, they say put enough money aside so you can get by for six months or a year. But in that market, I would say most people would have guessed the worst-case scenario would have been a 30 percent reduction in the market, not 70 percent.”

What Did We Learn?

The U.S. housing market lost an estimated $7 trillion in home equity, and 8 million Americans lost their jobs due to the financial crisis. The federal government responded with an unprecedented $700 billion taxpayer bailout for large banks and companies.

Darren Welsh, corporate counsel for Berkshire Hathaway HomeServices, noted that the biggest lesson from the downturn is that things seem fine until they suddenly aren’t. Despite skyrocketing prices before the financial crisis, caution was lacking. “Nobody was as cautious as you would think. It’s sort of like worrying about the Second World War… And we never really thought it would be that bad and then it just all imploded, it was crazy bad.”

Welsh sees some similarities between the pre-crisis market and today’s real estate scene, due to the spending, building, and buying surge driven by the pandemic. However, he believes the government has learned a few lessons from the financial crisis, given the handouts during COVID aimed at protecting the middle class rather than just bailing out big banks.

“I personally think (the government) were like, ‘We can’t let this happen again.’ And it’s funny because that’s how they treated the Depression in the ’30s. At first they were like, ‘Get over it, go get another job.’ And then pretty soon there were people sleeping in tents outside the White House, and they’re like, ‘Holy sh—.’”

Barbee, who started in real estate in 2003, emphasized that the key lesson from the Great Recession and the volatile real estate market is to hope for the best but prepare for the worst. “Give up the notion of control,” he said. “It’s more about if you have a good mop bucket to clean up the messes.”