The dentists are back in town, 27,000 of them. Up and down the Las Vegas strip they are fighting for cabs and bar space with rival conventioneers and a united nations of Chinese, German, Australian and British tourists.

Beneath the two million crystals of the eponymous Chandelier Bar at The Cosmopolitan hotel, everyone is getting loaded on cut price cocktails. In Tom Ford, Louis Vuitton and Prada shoppers are flashing their plastic.

Forget the hangover, Vegas is back. But not for most of the people who live here.

Of all US cities Las Vegas was the one hit hardest by the credit crunch. The city seemed emblematic of the excesses of the easy credit era. A huge property boom led to overbuilding as some people made fortunes from buying and selling homes they never intended to live in. Huge abandoned casinos mar the north end of the strip like so many busted flushes.

Now things are looking up. Visitor numbers are rising, hotels have upped their room rates. Home sales are set to hit a high this year – albeit at rock bottom prices. Houses that once sold for $400,000 (£252,000) are being snapped up for $100,000 by cash buyers.

But for those without ready funds getting a home loan hasn't been this hard for years.

National dilemma

Once again Vegas is proving to be a reflection of the country's wider problems. This is a tale of two cities.

For the rich – mostly from out of town – the good times are rolling. For those in coach they seem a long way off. This week the Republican would-be presidential candidates are in town, the economy is the only issue on the agenda and no city could provide a starker illustration of the nation's dilemma.

Nevada has gone from having the lowest unemployment in the US in 2006 at 4% to the highest now at 13.4%. US unemployment rate is 9.1% but Stephen Brown, director of the University of Nevada Las Vegas's center for business and economic research, reckons the real number in Las Vegas itself is closer to 24%. The poverty rate has doubled since 2010, the state has the highest rate of children with unemployed parents, according to a report by the Annie E. Casey Foundation. About 13% of all children in Nevada have been affected by their families being evicted from their homes.

Jim Murren, chief executive of MGM Resorts, the towns biggest casino firm, sees plenty of encouraging signs but, he says, "The remnants of the recession are still being felt today. You need look no further than the unemployment numbers or the foreclosure rate for homes.

"Prices have fallen 50-60% in some cases. Look at the tremendous pressure that's been put on public services, shelters, food banks."

After decades of "epic, unparalleled growth" this community was "hit as hard, if not harder than any community in the Unites States," he says.

"It's easy to see, just look at the shells of buildings as you drive up the strip," says Murren.

Things are starting to improve across the board, the recovery is "not as strong as we would like," but a recovery is underway.

But what will Las Vegas look like after the dust settles? For decades Las Vegas has been one of the fastest growing cities in the US. In the 1990s the population was growing at 4.5% a year. Now it's flat. The construction boom that drove that growth is over. Murren believes it will be a decade before any significant building project takes place in the city. Locals say illegal immigrants who did much of the heavy lifting have disappeared, an observation backed by a report from the Pew Hispanic Center last year that concluded the number of illegal immigrants entering the United States plunged by almost two-thirds between 2005 and 2009. Las Vegans are mowing their own lawns.

The boom years were crazy, says Linda Andrew Ness, national director of Smart City, a convention centre organiser. "It got to the point where sales people didn't even have to pick up the phone, the business just came in." Friends were buying and selling homes in a morning at huge profits, money was everywhere. "It was nuts," she says. Vegas today is a very different city, she says.

Her husband Jim Ness, vice president of Freeman, an audio-visual company that also works with conventions, grew up in the city. "We shrugged off other recessions in the past," he said. "When I was at school a lot of people weren't interested in higher education, they just left and got a job in construction or the casinos. Now if you haven't been to college, you are in real trouble."

Brown agrees. "In 2000 people parking cars could make $80,000 a year. Now from our masters programme we place people in jobs making an average of $65,000," he says. The easy money has gone.

That may be true for the middle class and below but the top end of the market is roaring back. Over at Maverick Aviation, where people charter private helicopters at $500 a person and private jet rides that can cost more than $2,000 an hour, director Bryan Kroten says their biggest problem is finding enough pilots to cope with demand. Maverick is poaching pilots from oil rigs in the Gulf states. "The top end of the market never left," says Kroten.

If anyone knows the top end of the Vegas market, it's Joe Vann, publisher of Vegas magazine, the city's glossy monthly. "The super high end is doing fantastically," he says. "Chanel and Dior are kicking butt. They are having record months at Louis Vuitton." The city at the moment is a "juxtaposition of diametric opposites," he says. While the death of the construction industry has claimed the thousands of jobs, there are seven Louis Vuitton stores in a seven mile radius and all doing well.

The world's rich have made Vegas their playground. On Mexican independence day the super wealthy Mexicans come here to party, on Chinese new year, it's the Chinese. "This is two cities," says Vann.

Doing more with less

The middle classes will come back, Murren says. Vegas is a cheap city to live in and the weather's always good, he says. "More than that people love coming here," he says. But he says it will have to change profoundly if it is to avoid the mistakes of the past. "We have to be very nimble," he says. The future for Vegas will not be one of big new casino openings, it will be about doing more with less.

"The philosophy of this company was to build spectacular, must see destinations, mostly in Las Vegas, and that by virtue of doing that people would feel compelled to come visit us," he says. The "if you build it, they will come" attitude won't work anymore, he predicts.

The rich may be rolling in but for the rest of Vegas, like most of the rest of the US, the future is about doing more with less.

"Growing up here people always said that we couldn't expand beyond x because of the water shortages. Then we'd get to x and they'd say, well we'll never get beyond y. That never happened," says Ness.

In the end it wasn't water that tamed this city in the desert, it was money.