Foreclosures increase as Nevada keeps top spot

Thursday, June 11, 2009 | 9:36 a.m.

See the RealtyTrac report

Next foreclosure wave building with defaults on fixed-rate loans (6-8-2009)
Report: Nevada's 31 percent home price drop tops nation (5-28-2009)
Las Vegas banks hit hard by bad loans (4-10-2009)
Housing collapse evident in falling tax appraisal values (4-6-2009)
Report: 58.2 percent of Las Vegas homes have negative equity (3-4-2009)
How Obama's mortgage relief plan pencils out (2-21-2009)
Nevada's foreclosure rate tops nation once again (2-12-2009)
Analysts disagree on timing of real estate turnaround (2-11-2009)
Home sales slow as prices continue to tumble (2-10-2009)

Although foreclosures fell in the nation in May, Las Vegas and Nevada weren't so lucky.

California-based RealtyTrac reported 8,876 notices of default were filed in May, the second highest month this year after 10,351 in March. The notices of default on a loan are the first stage in the foreclosure process.

Foreclosures show no sign of abating with 3,051 homes repossessed in May after dipping to 2,478 repossessions in April, a 23 percent increase.

Overall, the number of foreclosure filings rose 5.5 percent in May to 17,157 when compared with April. Filings are 83 percent higher than May 2008, which helped Nevada keep its No. 1 ranking in the nation that it has held for 2 1⁄2 years.

That means one in every 64 homes had a foreclosure filing in May, more than six times the national average, according to RealtyTrac. The second highest state was California with one filing for every 144 housing units. Florida was third, followed by Arizona and Utah.

The nation saw a 6 percent decline in foreclosures compared with April.

Even though there was a moratorium on foreclosures earlier this year, the April drop in repossessions had some real estate observers suggesting that would help set the stage for a rebound in homes prices. But the potential for a new round of foreclosures could suggest home prices might fall more.

The Greater Las Vegas Association of Realtors reports that prices of homes listed by Realtors have fallen 55 percent from their peak of $315,000 in June 2006. The median price of Realtor-listed homes sold in May was $140,000, a drop of less than $2,000 from April.

Las Vegas housing analyst Steve Bottfeld, executive vice president of Marketing Solution, said the increase in foreclosures is occurring faster than he anticipated. But this wave is likely to be different than previous rounds of investor-owned properties and others stuck with adjustable rate mortgages that reset, he said.

“This is middle-income families who are being impacted now,” Bottfeld said. That means the foreclosed homes are likely to be in higher price ranges, thus the median sales price of homes will increase, he said.

The Las Vegas Valley continued to hold the top spot as well for metropolitan areas of at least 200,000 in population. The city’s foreclosure filings increased 4 percent from April and 78 percent from May 2008.

Las Vegas had 14,681 foreclosure filings, one for every 54 households.

Las Vegas had 7,643 notices of default filed in May, which is 78 percent higher than May 2008. There were 2,566 homes repossessed, 529 more than April. There were 2,950 homes repossessed in Clark County in May 2008.

Discussion: 24 comments so far…

By jaesun

6/11/09 at 9:50 a.m.

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is there any credibility left for anyone in the real estate business?

<<Even though there was a moratorium on foreclosures earlier this year, the April drop in repossessions had some real estate observers suggesting that would help set the stage for a rebound in homes prices. But the potential for a new round of foreclosures could suggest home prices might fall more.>>

suggesting that prices would start rebounding already, after a drop in April?

come on now. throw away the lube and get your head of your your ass already.
By stevem

6/11/09 at 10:03 a.m.

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again, with this bottfeld guy.

for real...did he slip and fall at green valley ranch and part of the settlement was that he got his name in the paper every few weeks?

this is the SAME guy that just 3 months ago was saying "we're almost at the bottom."

now...foreclosures are happening faster than anticipated...

so, clearly...

he is no better at predicting the real estate market than my cat.

i'm a realtor in vegas. in my opinion, if you have 20% to put down, and you have 3 or 4 months worth of payments in reserve in the bank, and you plan on being in vegas for 2 or 3 years...it is a good time to buy.

if you're going to buy a home and try to squeeze out $100 - $200 in cash flow from rental income and flip it in a few months because you think there will be some kind of magic turnaround...stay away from real estate.
By AngryReader

6/11/09 at 10:12 a.m.

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A 55% drop in value. For some people, that means working until you are dead to pay off an artificially inflated home price.

Artificially inflated because IndyMac and Countrywide and others flooded certain markets with cash for no other reason that to increase the number of ARM backed securities they could sell.

If you owe 500K on 200K worth of house, it is time to walk away and let the ARM backed securities investors learn the true meaning of risk.

One class action suit is already underway against IndyMac, claiming they channeled minorities into these risky loans. The fact is that they channeled EVERYBODY into these loans.
By azbycx0918

6/11/09 at 11:18 a.m.

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At a rate of 3,000 reposessed homes per month, how many more homes can possibly go into foreclosure? There aren't that many homes in Las Vegas to justify such a foreclosure rate, unless virtually every home purchased between 2004 and 2006 is going to be repossessed by the mortgage holder. Is it possible that people buying a foreclosed home are themselves going into foreclosure?
By danscheper

6/11/09 at 11:53 a.m.

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I am in the real estate business in Hawaii and have been following the LV real estate market for years. I bought a nice condo a few years back for $206k, put $60k down with plans to pay it off and in a few years and use it as a 2nd home. The best I can tell, it I wanted to sell this unit now, it would bring around $90k, I owe around $135k. I think my position in this property is very typical and I'm sure 10's, maybe 100's of thousands of others are facing the same dilemma as I am. Should I continue doing the right thing, and pay off my mortgage as I agreed to, or, should I join the ranks of those that just walked away from the responsibility, somehow justifying it because the amount the property could be sold for is less than what I promised to pay back to the lender?

Is it a business decision, or is it a morel decision? If it was strictly a business decision it would be easy, walk away and buy a replacement at $90k saving $45k. The problem is, I've never been late on a payment, or not paid back anyone I owed money to in my life and am having a real morel problem with doing it now. My point is, will the 10's, maybe 100's of thousands of others that are facing the same dilemma, keep making payments when they see so many others just walking away? I have pretty much decided to hang in their, I was happy with the price when I bought it and nothing has changed except for what it would bring if I sold it, but selling it was never in my plans. My new plan is to average out by purchasing 1 or 2 more units near the bottom of the market. It depends on the decisions others in my position make, but I think we have another 20-30% to go before market values level out. I'll buy when we have 6 months of level prices.
By wedontneednostinkingcodes

6/11/09 at 12:29 p.m.

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not to mention, the homes built between 2003-2008 were built faster than any homes in history. whatta ya think they were built like crap?
By 2zero

6/11/09 at 12:39 p.m.

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Chicken wire and stucco, 2" crumbling slap, built by third world labor, all on a postage stamp lot...buy now.
By MrVincent

6/11/09 at 2:03 p.m.

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stevem says "i'm a realtor in vegas. in my opinion, if you have 20% to put down, and you have 3 or 4 months worth of payments in reserve in the bank, and you plan on being in vegas for 2 or 3 years...it is a good time to buy."

I agree with alot of some of the other things you say, but this statement is wrong IMO. Never buy if you only plan on being in Vegas for 2 or 3 years. Buying a property is a long term proposition, and 2 or 3 years is NOT long term.
By gold1020

6/11/09 at 2:14 p.m.

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In response to Angryreader. From 2002-2007-I never heard one person complain about ARM loans or Indymac or Countrywide when the value of their homes was going up by 25-30% per year. Back then everybody was all smiles as their home values just kept on rising & rising. Nobody complained back then & you shouldn't complain now.
By neiman1

6/11/09 at 4:29 p.m.

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A home is not suppose to be an investment. It is a place to live that over many years turns into an investment. Buying in hopes of profit and rises is for investment property, rentals, not your home.
By fremmasmind

6/11/09 at 5:20 p.m.

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I think everybody should tip a brewsky for any Real Estate Agent and any loan officer who have done their part in creating the economic mess we Americans are going thru now. At least they made their money. Now their complaining 'cause interest is down and they are in the newspaper quoting that the appraisers are setting prices to low.
A year and a half to two years ago they were selling properties at inflated prices. Making good money and probably thinking(hoping) this economy would go on forever. They made their percentage in profit on these sales.
I'm not trying to make anyone who had something to do with what our nation is going thru right now feel guilty, they know who they are. If they have some sense of loyalty to the citizens of our country they would fix the problem. Their loyalties lie in greed. Something they will have to live with. We as citizens certainly are.
By odeman

6/11/09 at 8:57 p.m.

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With the dollar sinking and T bill auctions garnering less enthusiastic participation thus higher interest rates, mortgage rates are on the rise again. If the rates get high enough many mortgages that did not reset due to the low rates will reset higher creating higher foreclosure numbers. With the rates going up the refi market, which was doing quite nicely, is going in the tank. The banks are still not healthy so they aren't going to be a lot of help. We are just now getting into the tip of the iceburg of defaults in commercial real estate. The hedge funds and speculators are quickly driving up the price of oil and gas. The economy could go back in the dumpster in a flash. The wild ride is far from over.
By revtomperl

6/11/09 at 10:23 p.m.

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Time to become less materialistic - while I am not Catholic, I think some past papal encyclicals suggesting that materialism is a horrible curse represent the truth. Repent and turn to God!
By stevem

6/12/09 at 8:11 a.m.

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ah, yes, here we go again...putting blame on the real estate agents.

that's like driving a hummer and saying the cashier at the gas station is the reason gas prices are so high.
By Wolfdog

6/12/09 at 8:14 a.m.

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All we doing is just renting our house from the bank. We will never own it. We can't leave it for our kids. We can't borrow against it. Why bother fixing it up for the bank? Let the next renter do it. Save your money, go have fun, travel, see friends and family and let the banks house go to hell.
By danscheper

6/12/09 at 12:41 p.m.

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Wolfdog - you CAN own your house, just quit blowing your money on having fun! Just add that $500 or so you blow every month to your house payment, if you live in a typical LV home worth around $130k, you'll have it pay off 100% in less than 8 years! Then you can start having fun!
By danscheper

6/12/09 at 1:23 p.m.

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Don't blame the Realtors or Mortgage brokers, they were just helping people do what they wanted to do, and what was made very easy, way to easy to do by our government. The liberals in congress wanted every American to be able to own a home, even if they couldn't actually afford to own it They designed loan programs, and forced lenders to make these loans that would tempt even the most cautious into getting in on the big boom and the easy money. Our Democratic congress knew what was going on and did nothing about it. Its all part of the big plan to make more and more Americans dependent on the government and willing to vote for those that promise free money to all! If you want to blame someone, blame congress, and your self for voting them in!
By saltydawg

6/12/09 at 2:37 p.m.

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Get real, man. The liberals didn't get control of Congress until 2007. It was the republicans who control everything from 2001 to 2007.

Don't listen to windbag radio.
By choonzer

6/12/09 at 3:23 p.m.

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I'd take it a step further...don't blame the dems or repubs. Everyone got what they wanted out of those years -- the lenders, banks, agents, builders, brokers, and consumers. Everyone took risks they shouldn't have, spent more than they needed to, and got hooked on the ease and profitability of it all. Now it's time to pay the piper. A lot of folks need to just put on their big-boy pants and accept responsibility for their part in it. Unfortunately, as a nation, we're as hopelessly hooked on blaming as we are on credit.
By vegas104

6/12/09 at 9:47 p.m.

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Vegas is a cluster. Without industry diversification (other than gaming/hospitality) our economy cannot grow. Without growth we will have no jobs and no one who can afford to buy these distressed assets. We have too much inventory, not enough jobs, and not enough hot speculative flipper money coming in to take inventory down.

Our state government needs to do something now to attract new business to this state/clark county. How about green energy - there is ton of open land that could house huge amounts of solar panels and we could become a net exporter of clean energy to other states (other than the hoover dam)- of course there probably is some sort of endangered species that hinder this type of project.

Point being - Vegas is too leveraged in one-type of economy based upon irresponsible consumer consumption and your average Joe is tapped out.
By stevem

6/13/09 at 10:12 a.m.

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i agree vegas104.

so much of the housing boom was the housing boom ITSELF.

it was growth to support growth.

people came to vegas to work in construction...so they needed homes...so we had to bring more people to town to build those homes...and we needed grocery stores for those people...so people came to town to build those grocery stores...so we needed to build more homes for those people...

and we had miles upon miles of flat, vacant land to do it.

now, i don't think there will ever be enough construction jobs to ever get things going again at the pace we need to create more demand than supply to get prices up.
By its2hot

6/13/09 at 6:20 p.m.

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One has to love the stupidity of Liberals. Clinton is the root cause of the financial mess we're in today you lunatic lefties.

President Bill Clinton repealed the Glass-Steagall Act which had prevented the coupling of investment banking and lending. To be exact, on November 12, 1999, President Bill Clinton signed into law the Gramm-Leach-Bliley Act, which repealed the Glass-Steagall Act of 1933. One of the effects of the repeal is it allowed commercial and investment banks to consolidate. Economists have criticized the action.

Bottom line, Democrats wanted lenders to loan to people who wouldn't normally qualify for mortgages and we're paying the price for these idiots who purchased homes without the means to pay for the homes. Just another example of how the lunatic democrats will stop at nothing to screw America and sell us out to foreigners. Obama is no different; he is just as much as an idiot as the rest of the Democratic Party Buffoons.
By Dawgdayafternoon

6/13/09 at 9:22 p.m.

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Dear its2hot:

Re the subject of "stupidity" and "buffoons", you are, I trust, aware of the fact that Gramm-Leach-Bliley was authored by Sen. Phil Gramm (R-Texas), Rep. Jim Leach (R-Iowa), and Rep. Thomas J. Bliley, Jr. (R-Virginia), right??

Bottom line: the big banks wanted to gain even more power, so they relied on the usual assortment of Republicans in their pockets to write the legislation they needed to repeal Glass-Steagall (authored by Sen. Carter Glass, D-Virginia and Rep. Henry Steagall, D-Alabama), and the moderate Clinton, no doubt realizing that Congressional voting margins would have made veto impractical, signed it into law.