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Foreclosure sales have home market feeling down
Monday, March 16, 2009 | 2 a.m.
When Nevadans started to realize they were at the epicenter of a full-blown foreclosure crisis in 2007, riding a rising wave of loan defaults that eventually turned into auctions and bank repossessions, they didn't really understand what was in store for the real estate market. In the valley today, foreclosure sales largely outpace regular sales, and they drive the median price of single-family homes down considerably — by roughly $25,000 in February.
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And it's not over yet. Anybody who claims the end to the foreclosures has been reached is painting a feel-good scenario. A sad commentary on the massive residential and commercial over-building, combined with all the bad paper written to sell them.
The 'wonks in the know' have no crystal ball to predict how long it will take Las Vegas to correct the disparity between the overinflated real estate values and realistic appraisals, let alone how long it will take to re-inhabit the emptied structures.
One thing is certain: Homeowners paying property taxes are going to be appealing those rates based on unrealistic assessments.
So much for that tax revenue base that fed so much unrestricted growth............
Great graphs. They amke it crystal clear that from June 06 through December 07 the market was trying to hold back on a pricing problem. Buyers and sellers were diverging on prices and less and less business was being done. Then the sellers could not hold back anymore starting in January 08 and prices plummeted, but at least sales started to pick up at the more realistic asking prices.
I have watched my home loose over 50% of it's original value. I bought my home in the fall of 2006 for $480,000. I now need to sell my home and I have dropped the price $225,000 & still can't sell it because the foreclosed & bank homes are in the mid to upper $100,000. Of course the realtors won't drop their commision rate, so if I sell any lower, the realtors will be the only one getting any money. My only choices are to hope for a short sale, or just let it go. The banks/lenders are the culprits, but hey, lets just give them some more money to help themselves out and forget about the homeowners. The whole process of who gets bailed out, sickens me!
The sad part is that they're not even putting the money to good use - they don't plan to help homeowners - instead they plan parties and conventions.
namesfuzzy: Don't let it just go back. The bank as every right to go after you for the difference if you do. Try to rent it! Or short sale so you don't end up getting sued for the difference later after you have moved on. These banks are going to be aggressively seeking to re-capitalize by going after people later. They only need spend a couple of thousand later to make your life awfully hard to live. Imagine 4 years from now they start taking money out of your check or are able to keep you from getting a job because of a judgement on you credit report. In a few years the market will stabilize and you will be able to sell then maybe not at a profit but at least with your dignity. Good Luck!
When the housing prices started shooting thru the roof and the "value" of their homes was astronomical, no one was complaining. As badly as I wanted to own a house then, I just couldn't afford it. I'm not poor, it's just that when I did the math and looked at the possibilities (like loosing my job or prices going down), I just couldn't afford it. The banks and Realtors all gave me the same pitch... "Prices NEVER go down" and "If you don't buy now, you NEVER will" and "All we have to do is get you in and then we can refinance you later". I was telling people this couldn't continue even before people were talking about the housing bubble and when it popped, now people are crying. I feel bad for folks when they loose their home, but many of them should never bought it in the first place. This whole mess wasn't hard to see coming. I even told people about where I think the bottom was going to be. 2000 prices +/-5%. And yes, we are almost there.
My father taught me the rules to own a home:
1) It shouldn't cost more than 2 1/2 to 3 times your yearly income.
2) Your payment shouldn't be more that 25 to 30% of your take home pay.
3) You should never have so much debt that you can't save 10% off the top.
4) Take as much time thinking about spending money as it took you to earn it.
Very few people that followed these ideas are in trouble. My Dad was a pretty smart fella.
Anyone having credit problems as the result of the housing downturn need not worry. There will be millions of people with bad credit because of this economic mess and most employers will understand because many of the employers will be in the same financial predicament themselves! Lenders will also come around in time and be willing to lend to those with substandard credit and with reasonable interest rates. The banks don't make money unless they lend it.
Two potential employees apply to work at R.C. Willey to sell furniture. They both have same education and background. They both have same work history. #1. Has great credit with no late pays or charge offs. #2. Has a home foreclosure with many late and no pays before the bank foreclosed. Guess who gets the job? #1 Remember not everyone is in foreclosure. Some people are continuing to do what is right and make the payments. Those will be the ones working later.
You can hand the keys to the bank and deal with the credit problems for the next 7 years or you can wait 15 years for the price of your home to come back to where you purchased it.
My question to all of you is: What will Vegas be like in 15 years?
It's the desert for goodness sake. Lake Mead will be dried up by then!!!
Another thing about a recovery in Vegas". it won't happen until the rest of the US recovers. Las Vegas is dependent on the rest of the country to survive, it isn't sustainable by itself. Get out while you can!
Wow, what a bunch of gloom and doom!
Values in segments of Las Vegas have dropped 50%-70%. Most of those were the new homes with no lots which were built on top of each other, and those built in north las vegas.
Homes built in the corridor just south and west of the strip have held up a lot better if they aren't trashed.
Short sales don't work because they take 3-4 months and the buyer has very strict rules from the lender to qualify. 99% of those either fail or take 6 months to complete.
If you think Vegas is doomed then you are entitled to that opinion, but in reality there is just so much going for the city outside of gaming to make it survive. Gaming will be just fine too, had this economic situation had happened in 2005 casino companies would not be in the news for bankruptcy every day like they are now. Most of the leveraging of these companies happened post 2004 when Caesar Entertainment, Mandalay Holdings, Horseshoe, Tropicana resorts and some other small casinos were bought out. City Center was a small irish themed casino and there were apartments behind it. Really we are just viewing the casino in a moment in time, not how things are going to turn out.
In 3 years from now all the casinos on the strip will still be open that aren't torn down, the owners may have changed, but there will still be 3+ million people visiting here. The water situation is really a non-situation, the economy will bounce back, people will still take vacations and want to come here.
If you are doom and gloom about this place just take a trip back east and see everything close from 10:PM to midnight, all the blue bloods being uptight at everything, gaming not as fun because of the rules and regulations, taxes being a lot higher. This place is what it is because taxes are basement low, laws are in place to enjoy yourself and you can walk out of your hotel room onto one of the best shopping/gaming/entertainment/dining options in the world. People come here to get away from places that are structured and controlled by conservatives.
If you don't like Vegas you can also leave, there are millions of people who want to replace you.
Reality check gqbossing
Doom and gloom". It's called looking in the best interest of your family.
Just because Obama and Bernanke say things will be better in year doesn't make it so(although we can all prey it does). Do you understand Vegas was founded on corruption and deceit? That bubble popped! Along with housing and credit, the people of America are leveraged to the gills.
I never meant to imply Vegas would disappear but the majority of the suburbs will. You will begin seeing houses rot from lack of maintenance. Transients will probably move in. Why anyone would raise a family in Vegas is beyond me, sure things have been great the past few years but it was built on a false premise.
I'm not in Vegas btw I'm trying to get family out, they can't sell their house! Yeah I would love for Vegas to go back to rainbows and unicorns, but guess what? It aint happening , those who stay will not have it easy but then again who in America will?
It's 1929-1930, this is the beginning regardless of what the MSM says while the banksters rob us blind. Three years is 1933, that's when things will get nasty. Bad credit will be the least of your problems.
I really hope I'm wrong but the difference between me and many other people is that I understand how history repeats itself.
Maybe I should go read the book "The Secret" if we all think happy thoughts all the bad things will go away...
Reality check? I live in Las Vegas, have for 3 years. When my primary job cut my salary and benefits I didn't moan, I got a second job...
I didn't vote for Obama although I support him now because so many people voted for his "message" and he's the president of my country.
Vegas outside the gaming is really no different that any other big city. I lived in the midwest, they have prostitution, gambling, drugs. Last time I checked they stopped building in almost every other city too.
I feel for you if you bought during the boom (or took cash out of your home) and now are suffering, but thats the way the world is, take a risk and sometimes you get burned.
Vegas is just fine, it's been fine and it will be fine. It's built off greed, disposible income and desire for getting away from the grind and those fundementals are human nature and aren't changing. This isn't just a US destination, about a quarter of visitors aren't even from the US, it's the destination of humainty because it offers experiences not found anywhere else. It was origionally built to serve as entertainment for the Hoover Dam migrants, then for wealthy managed by the mob, then tacky cartoon cheap vacations and now trying to do the luxury thing.
Just about everything in life has ebbs and flows, if you get in on the ebb part or hedge wrong during flows
If anyone believes Bernanke they are in for a rude awakening. And by the way Lasvegas2009 who are you to judge anyone in foreclosure? If I had an applicant with a great work history who honestly talked to me and told me about their negative credit report in advance I would probably hire them anyway. and by the way I have an 830 FICO score. That does not give me the right to judge others.
LV2009 is trying to tell everyone that it's a sin to let your home go back to the bank. Wrong. He (she) is an uninformed dope who thinks the banks will go after 20,000+ homeowners just in our Valley. Sure, 30-50G a pop cost for chasing down Joe Dokes. It's amazing how uninformed he (she) is. Go back to Utah, 2009, and drink your near beer to your hearts content....
namesfuzzy, Here's what I would do: Give the home back to the bank and immediately file suit against LasVegas2009 for giving you some of the stupidest legal advice in Internet history.
Don't let the housing shills talk you into being morally obligated to keeping an asset that will make you a financial slave with no hope of getting back to break-even. True, Nevada is a "recourse state," so a bank could "try" to get its money back, but I would defy LasVegas2009 to come up with ONE EXAMPLE in Nevada where that has happened.
You know why? Because the banks know they fudged the figures on their end of the deal just as bad or worse than some of the borrowers. The last thing the banks want is having to answer questions under oath in court about how they made these loans.
Give back the home. In contract terminology, it's called "Efficient Breach," and it happens every day in this country when one party is unable or unwilling to perform his contractual obligations. If you can't pay/won't pay, the bank takes the house back. That's it. They don't get your first-born child. That's the end of the deal.
The sooner you fall behind and default, the better, because you never know when the gov't will get involved in some half-a$$ed effort to stop the flood of "walkaways."
You said it judgesmales. The banks have alot of gall to tell mortgage holders deep under water that they have a moral obligation.
lol, banks preaching morals....
Congress changed the ruling over a year ago. Debt forgiven in a short sale is no longer taxable income as long as the property is a primary residence, NOT an investment property.
If you made a mistake and bought an overpriced house, face the facts, admit it. Honor the commitment you made, or get lost. You bought in a buyers market...sucker.
I grew up in Vegas and my folks still live there, although I left over thirty years ago; I come back every year or so. Fully five years ago I was agog at the runaway house prices, even in 2004: my sister had bought a nice house off Torrey Pines and Tropicana in 2001 for about 175K, had refinanced and extracted 50K only 18 months later, then sold the house in early 2004 for 325K, making another 50K easily, which was, to my N. Idaho mind, just insane. My brother[who lives in NM] and I thought the real estate bubble was insane and inevitible to burst in catastrophic fashion. To me, the most astonishing thing is that it took so long. Yes, even in N. Idaho, there was a bubble in real estate, which has burst. Read of the Tamarack Resort disaster down by McCall, Id; still overall in Idaho, the mining and logging are worst hit by the bubble-burst, not housing. My home maybe went up 20% in value and probably has lost the same in the past year; but we are talking of housing in the 100-150K range.Pdunham5 sounds like his dad was giving good advice. I do not really blame the people buying those houses in Vegas, I blame the banks or whoever OK'd such idiotic loans, ARM's and all. It was obvious to some of us five years ago that the boom was a house of cards.