For Valentina Decarlo, who lives down the block, the situation is even worse. A longtime Las Vegas resident, the 39-year-old has spent almost 20 years working as a cocktail waitress, currently at Wynn Casino where tips supplement her $32,000-a-year paycheck. She took a gamble of her own last July when she put down $77,000 on a four-bedroom house.

After DeCarlo got stomach cancer last October, though, she missed work and started relying on credit cards to stay afloat. She's struggling to keep up with her $2,140 monthly payment. While she paid $367,500 in July, 2006, DeCarlo thinks similar properties are now going for less than $300,000. That means her home may not be worth more than her outstanding mortgage, so she can't easily refinance. Her lender, Countrywide, suggested selling the home at a loss or finding roommates, she says. "I'm going to lose everything that I've worked so hard for," says DeCarlo. "Our primary objective is to keep people in their homes," says Jumana Bauwens, a Countrywide spokeswoman, who adds the lender has completed more than 35,000 workouts on troubled mortgages in 2007.

If DeCarlo can't find a solution, she will face foreclosure, an increasingly common occurrence in this rapidly deteriorating market. Foreclosures in Las Vegas are the highest in the nation. And there's no sign of a slowdown: New filings in the city topped 33,000 through August, vs. 19,909 in all of 2006, according to the data firm RealtyTrac. The fallout in Las Vegas has been so bad already that Nevada Governor Jim Gibbons has called for a housing summit on Oct. 4 with the city's five largest builders, five largest banks, and others like Freddie Mac and Fannie Mae to figure out how to help troubled homeÂowners. "We are trying to target those folks who are headed downstream toward the waterfall before they get into trouble," says Lon A. DeWeese, chief financial officer of the Nevada Housing Div.

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Speculators, especially those who bought late in the cycle, are likely to get hit the hardest. Roxasita Yasul, a 66-year-old retired hospital assistant, decided in late 2005 to supplement her Social Security and her husband's pension by investing in real estate. Back in the 1980s in California, she had tried her luck picking up houses at auction. It was a pretty successful venture. So she got her real estate license and bought four houses last year in new Vegas communities, including one in Huntington. Like most investors, a group who's rapid-fire buying and selling helped fuel the boom in this area, she figured she could always sell the properties in a rising market.

It hasn't worked out that way. Yasul paid $350,000 for the two-story home on Quayside Court in June of last year, but she expects it wouldn't bring in more than $300,000 today -- if she could even find a buyer. She's not interested in selling now, hoping to wait for the market to rebound. "I'm not lucky with this one," says Yasul. "Those easy rates and interest-only loans will come due, and people will get hit with reality. The outlook is very gloomy."

In the meantime, Yasul is desperately searching for tenants. That causes its own problems. Too many renters in a neighborhood can further depress prices, a worry that's already causing consternation among her neighbors. "It's like living in an apartment community," says Elder, her Huntington neighbor. "Renters don't care as much about the homes if they don't own them."

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The current housing downturn and the damage it's inflicting on the overall economy are far from over. With a slew of risky, adjustable-rate mortgages still to reset next year, foreclosure rates could climb even higher. That's a big reason why the stocks of the nation's 20 largest homebuilders have fallen an average 65% since the start of 2007. But there a few weak rays of light at the end of the tunnel. Builders are taking the painful step of cutting production. Permits are down 49% from the market's September, 2005, peak. That's half the time it took to reach this point in the last decline. "Builders definitely responded more quickly this time, and that's a good thing," says Banc of America Securities analyst Daniel Oppenheim. "But the inventory overhang is so great, it's going to take a long time to work through this. They still have a ways to go before there's a recovery."

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