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October 21, 2014

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Report: Nevada tops foreclosure list for 31st month

Three more reports show that the Las Vegas and Nevada real estate markets remain at or near the top of the nationwide lists for foreclosures, lower prices and homeowners being underwater in their mortgages.

RealtyTrac of Irvine, Calif., today said that for the 31st consecutive month, Nevada had the nation's highest foreclosure rate, with one in every 56 housing units receiving a foreclosure filing in July -- more than six times the national average.

Initial default notices in Nevada decreased 18 percent from June, which RealtyTrac said is likely the result of a new state law effective July 1 requiring lenders to offer mediation to homeowners facing foreclosure.

But scheduled auctions and bank repossessions in Nevada both increased more than 20 percent from the previous month, RealtyTrac said.

Foreclosure filings were reported on 16,798 Las Vegas properties in July, one in every 47 housing units, RealtyTrac said. That's more than 7.5 times the national average and the highest foreclosure rate among metro areas with a population of at least 200,000.

The Las Vegas area housing market has been slammed by both the subprime mortgage crisis leaving homeowners unable to afford monthly payments that reset higher; and soaring unemployment that reached 12.3 percent in June.

Nationwide, foreclosure filings -- default notices, scheduled auctions and bank repossessions -- were reported on 360,149 U.S. properties during the month, an increase of nearly 7 percent from the previous month and an increase of 32 percent from July 2008, RealtyTrac said.

The company said one in every 355 U.S. housing units received a foreclosure filing in July.

"July marks the third time in the last five months where we've seen a new record set for foreclosure activity," James Saccacio, chief executive officer of RealtyTrac, said in a statement. "Despite continued efforts by the federal government and state governments to patch together a safety net for distressed homeowners, we're seeing significant growth in both the initial notices of default and in the bank repossessions.''

Separately, the National Association of Realtors this week said existing home sales in the second quarter showed healthy gains in most states as lower prices increased affordability in most metro areas including Las Vegas.

The Realtors said that existing-home sales, including single-family homes and condominiums, rose 3.8 percent to a seasonally adjusted annual rate of 4.76 million units in the second quarter from 4.58 million units in the first quarter -- but remain 2.9 percent below the 4.9 million-unit pace in the second quarter of 2008.

The median home price in the Las Vegas area fell from $155,300 in the first quarter to $141,800 in the second quarter, the Realtors said.

For condominiums, Las Vegas leads big metro areas in affordability, the Realtors said. The association report found the local median condominium price fell from $75,200 in the first quarter to $66,400 in the second quarter.

Also this week, Zillow.com of Seattle issued its second quarter 2009 housing report, showing U.S. home prices fell 12.1 percent from 2008's second quarter, marking the 10th consecutive quarter of declines.

Zillow.com said 23 percent of U.S. homeowners now have negative equity, meaning they owe more on their homes than the homes are worth.

The report found Las Vegas was the third worst-performing market in the quarter, with home prices down 34.6 percent year-over-year, falling to a median of $140,500 -- with a staggering 82.5 percent of local home mortgages having negative equity.

"While we are encouraged by the increasing sales in many markets ... and the overall improvement in the rate of decline (of prices), I hesitate to be overly optimistic for the near future," Stan Humphries, Zillow chief economist, said in a statement. "There are still many hurdles to true market recovery. Foreclosure re-sales are buoying overall sales numbers, but their low prices are keeping home values down. Reports of increasing mortgage defaults signal that foreclosures are likely to increase again and peak in mid-2010. With increasing unemployment and high rates of negative equity, we have a fertile breeding ground for even more foreclosures, which add to the already-high level of for-sale inventory that needs to be cleared before values begin to rise.

"While the abundance of affordable foreclosure properties is a boon for many first-time homebuyers, I don't believe we'll see significant recovery until demand-side fundamentals improve, and more move-up and move-across buyers re-enter the market."

These three reports follow Monday's release of July housing statistics by the Greater Las Vegas Association of Realtors.

The Las Vegas Realtors said that with bank-owned foreclosure sales still dominating the market, sales of existing homes, condominiums and townhomes in July totaled 4,602, down just 100 from June's record numbers.

July's local median price of existing single-family homes was $138,800 and the median price of condominiums and townhomes was $67,000. Compared to the previous month, this represents a 0.9 percent decline in the median price of homes and a 1.5 percent increase in the median price of condos and townhomes, the Las Vegas Realtors said.

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