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Thursday, Nov. 11, 2010 | 9:12 a.m.
Las Vegas home values as measured by Zillow fell 4.2 percent in the third quarter and pushed the region’s percentage of underwater properties to 80.2 percent.
The number of homes underwater -- when property owners owe more on their mortgage then the home is worth -- increased from 78.1 percent in the second quarter, the Seattle-based firm reported. Phoenix ranked second with 68 percent underwater during the third quarter.
“The high percentage of homeowners in negative equity continues to be troubling in that it represents a huge number of people who are not only more vulnerable to foreclosure but who are essentially trapped in their current homes and are prevented from selling and buying a new home,” said Zillow Chief Economist Stan Humphries. “This has profound implications for future demand and will be a millstone around the neck of the housing market.”
In September, 39 percent of homes sold in Las Vegas were for a loss, up from 20 percent in September 2009. Nationally, 27 percent of the homes sold in September were for a loss, the firm reported.
Zillow, which says it measures the value of all homes and not just those sold, reported home values have fallen 58 percent since their peak in May 2006 -- back to August 2000 levels.
In Las Vegas, 47 percent of all home sales in September were foreclosure sales, down from 49 percent in September 2009. Nationally, foreclosures comprised 20 percent of all sales.
Zillow reported that while the valley’s home values fell 4.2 percent in the third quarter compared to the third quarter of 2009, unincorporated areas of Clark County fell the most. That includes a 9.2 percent decline in Paradise and 5.3 percent in Enterprise and Spring Valley. Mount Charleston had a 23 percent decline.
Among cities, Las Vegas fell 3.8 percent, Henderson fell just less than 2 percent and North Las Vegas fell just less than 1 percent.
Boulder City had a 7 percent increase and Summerlin South rose nearly 7 percent as well, according to Zillow.
“While not unexpected, the unceasing declines in home values signal that we’re in for a long bleak winter of continuing troubles for the housing market,” Humphries said. “The length and depth of the current housing recession is rivaling the Great Depression’s real estate downturn and with encouraging signs fading, will easily eclipse it in the coming months.”
I'm surprised only 80% of homeowners are underwater. I would've guess it was closer to 90%...although I think more bad news is coming so we still could hit 90%.
Hi green617, for what it's worth, it's gone up more than 10 percentage points in the past year. In November 2009, 69.5 percent were underwater, according to the same report.
http://www.lasvegassun.com/news/2009/nov...
This article is a little miss leading because as long as your are only spending 1/3 of your income on your housing cost, you are the norm. That like saying that if you own your home your underwater just because the value of your home is not what you paid for it. Your home is an investment, just like your mutual fund and stock, it goes up and it can go down. Now if you are spending more that 50 percent for housing cost, your in trouble. The standard for years in the industry was 1/3, everyone got greedy and now it time to cough up. If you look at the lending industry today they are strictly back to the 1/3.
Hey Obama, didn't you promise to bale these people out when you campaigned in Arizona????
Hey....they can have mine now to!! I think your going to see a rush of foreclosures mid 2011. I think a lot of people are going to quit making payments in January...along with saving there income tax money. Tax money + 9 months of no house payments = BAILOUT!!! Stick it Bank America. Remember mortgage forgiveness ends January 2012. Strategic default is the only Option.......
The one and only bright spot in the housing crisis is that Harry Reid was re-elected and will fix it shortly...
But first, Harry will be busy for a while defending ObamaCare and the rest of Obama's political agenda.
Jeez, I bought a house in Henderson in 2000 new for $143,000. Put 20% down to avoid PMI, and refinanced to 5.5% 5 years later. Took no no money out. Countrywide told me to buy another house, and said I qualified for $300,000. I told them where to stick this idea.
The point is that Zillow values my house at $131,000 now. Boo hoo. But I only owe $86,000. Didn't other people do the same things? Are we a greedy state of 90% Real Estate speculators who are now taking it in the shorts? Sadly, I think so...
I agree with you express445. I don't think any of us are victims in this situation. Nothing says that our home values are guaranteed to go up.
This is a huge mess and there are plenty of people to blame. I think a good start to getting this mess in check would be to allow bankruptcy judges to write mortgages down to their value for people who didnt cash out. This would be a big step. Now people who cashed out need to pay. That was greed. But alot of innocent people who bought homes that were within their income level and saw the value drop over 60% and are now stuck in a home even if there situation changes need some relief and I think the courts are a good way to pursue this since the banks are definitely not going to do anything.
its called a home. you live in it. you put your stuff there. If your concerned about the Value then the home becomes and investment. If you live in your investment, you screwed up. If you need to have the value of your investment to continue to rise in order to finance\leverage your home, you gambled and lost.
Darcy Spears and her contact 13 specials dont seem to explain why the delinquent bofa mortgage holders cant afford to pay for their HOME. Well here's the answer: Because they are renters! Bofa, the government, the city, and the taxpayers didnt agree to buy the overpriced investment at the height of the market - YOU DID. You lose. Seven out, line away.
zillow values properties homogeneously. that is to say that there is nothing in their valuations that accounts for the uniqueness of individual properties, such as landscaping, upgrades and amenities, all of which buyers are willing to pay for to some degree. to say that the house i live in, for example, which is well-maintained and upgraded is worth the same or less than a neighboring house that is vacant, unlived in and uncared for is just based on some arbitrary price per square foot average. that's not fair.
"Too bad Nevada elected perverts and idiots from the republican party to run this state."
Pure hate from those on the Left...
The headline is not accurate. It should read, "80 percent of homeowners WITH A MORTGAGE are underwater." Believe it or not, some people actually live in their homes long enough to pay off the mortgage. If you own your house free and clear, then it's impossible to be "underwater" because you don't owe anything. According to the US Census, 33 percent of all homes in the US are paid off. Was this percentage factored into the story? Probably not.
@Las Vegas2009- Like your idea. I'm going to buy a home hopefully this year myself. The deals out there are great and I'd like to take advantage of it. Heck thats cheaper than a car.
@iwonder:
"zillow values properties homogeneously. that is to say that there is nothing in their valuations that accounts for the uniqueness of individual properties, such as landscaping, upgrades and amenities,"
This is not really true. The algorithm Zillow uses is (in a nutshell):
1. Take the last selling price of the home.
2. Adjust that price forward from the date of the last sale to the present by looking at other more recent sales in the area to determine how they moved in that time period.
So step #1 takes into account the amenities since the person who bought the house took that into account. Step #2 just says something like "in the last 3 years since that last sale of this home, prices fell 40% in this neighborhood, so adjust the price we got in step #1 down 40%".
This is actually a very fair and relatively accurate algorithm. The only difference would be if the home had such a unique amenity that it was effected differently by the overall market move. I am pretty certain this is not the case for 99% of the homes out there. The $300,000 home with the marble countertop and fancy bathroom moves down 40% just like the $250,000 home without that upgrade. In the end, it is still 20% more expensive, though. Now the homes in our example are worth The last sale price determination makes sure that is taken into account.
Can you say THANK YOU HARRY!
It's unbelievable that you people would re-elect the very guy that is responsible for the current state of the economy, totally unbelievable!
Don't you people have a clue of what's been done to you by the unions! Now, Harry's crew is lowering the value of your dollars by 25% plus! I hope all you people really like beans and rice, that all you will be able to afford! Way to go idiots! Now you will get to sleep in the bed you made, and don't even think about complaining, YOU DID IT TO YOURSELF!
@cwcommish-
Hallelujah! It's nice to hear that I'm not the sole voice that hasn't been blinded by sympathy and compassion. ALL investments contain risk! Finance 101.
Housing 101. A home is not an ATM machine. Sadly when the values starting going up people saw an opportunity to take some cash out. Not to fund retirement accounts. Not to pay medical bills. Not to renovate a bathroom. ..
They took vacations, got plastic surgery, sat at the $25 blackjack table, bought cars valued at more than they made in one year.
And on and went the spending. Clearly there are some in that 80% who got burned thru no fault of their own, but there is a huge portion in there that saw "free cash" and took it. Problem was it was not realized cash, but imaginary based on the value of their home. We all know what happened next.
vegas real estate is pretty much over. it will take years, if not decades for enough people to visit vegas, drop a few grand on a 3 day weekend, and give hotels and resorts a reason to start building and bring in construction workers to fill up all the vacant homes.
no construction = no home price increase.
Jeez, why the anger towards the homeowners in the comments? The banks made the appraisels and they determined how much of a loan to give on the property. The banks signed the checks, it's THEIR investment too.
Banks and corporations dump bad investments/debts all the time, its considered good business.
The stigma attached to ordinary people not paying their mortgages on these underwater homes is laughable. Only an idiot would pay twice the price a house is worth.
http://money.usnews.com/money/personal-f...
I read all your comments, except the idiot political stuff.
It seems as if this corporate loving, wanna be free market society has finally learned a lesson. But, I would bet all I have that the lesson will soon be forgotten if only you could start getting those credit card offers in the mail again. Or how about that good deal on the gas guzzling semi-tank to pick up the kids in. Oh yeah, let get on the list to by that house that can only go up. Complaining and finger pointing isn't learning. Learning is learning!
If we could actually get them to tell the truth a large segment of home owners foreclosed or underwater would admit they knew the house was overpriced when they bought it. They figured to live in the house for a year or so and flip it to some sucker for a profit. Turns out they were the suckers. Now that they got the short end it's everyone elses fault but their own. Unless the bank dragged you in off the street and held a gun to your head and made you sign the papers it's your fault. It's called the free market. If you are stupid, greedy, or unlucky in your purchase time to man up and admit your error. When you blame Harry Reid or Obama for your poor decisions it just tells the world you really are too stupid to learn from your mistakes and too ignorant to educate yourself.
As far as principle reductions, no way. If you can't afford it, lose it. If the banks start giving priciple reductions it would cascade into another disaster for the financial system as droves of underwater home owners would quit making their payments hoping for a reduction. It would also bring home values down further thus creating more underwater homeowners looking for reductions. Then the first reducers would then be underwater again and they would apply for another principle reduction. A merry-go-round that only stops when the financial system collapses and our way of life goes back to the stone ages.
VC,
You make me sick to the stomach. We've turned into a country of handouts...
Why in the world should anyone pay anything less than the price they contracted for ?
And you think the "responsible" people are the ones who didn't take money take money out of a bloated asset they got duped (dupees) into buying at the top ? LOL A blind man in a snow storm saw this coming...These "responsible" people are getting a free ride off the coattails of the real "responsible" people who either through luck or skill bought at the early part of the upswing cycle or, like me, have been and continue to patiently wait for fair value to reassert itself....not to mention those who continue to honor the crappy deal they got themselves into regardless if they took money out or not...
As far as stick it to the banks and let'em go out of business, has anyone who believes this ever given a thought of life without banks? Doubt it. No mortgages, credit cards, debit cards, no credit at all except for the local loan shark. The guy who breaks your legs when the payment is late. No online bill pay, no direct deposit. The financial system would collapse and we would be back to subsistance living and barter. Back to the caves and survival of the meanest and fittest. I'd love to see the Wall Street and banker types roasted over a spit but not at the cost of sending this country and it's people back to the stone ages.
PEOPLE, please learn the following before posting again here.
You're = Contraction. (eg. You are in trouble.)
Your = Possessive. (eg. Your car, your house.)
It's driving me absolutely crazy to read some of the grammar in the comments section. My God, did any of you get past the fourth grade?
Thanks for the grammar lesson there CW. Your absolutely wright...
Even if the banks screwed up, or were even dishonest, with their lending practices, it doesn't mean the homeowners can sink even lower and just walk away from their obligations. Didn't we learn those values in kindergarten? It's called being a responsible adult, regardless of what others are doing.
YOU'RE NOT A VICTIM!!! Stop acting like one. Grow up and accept the fact that you made a mistake and bit off more than you can chew. Lots of us did it, and many of us are handling it with a little dignity.
But of course, some people think that a few extra dollars trumps dignity and self-respect.
I just did a word search in 33 comments for the word "Bush" and did NOT FIND ONE INSTANCE of the name. However, I did find Harry at least once.
The reason 80 percent of the homes in Las Vegas are underwater is because this town has a memory about two months in duration.
When standing in line for a show and the person in front steps on their toes, that same person will turn around and punch the guy behind, warning him to read the Bible or be cast into eternal damnation.
Perhaps the 'underwater' condition is a prelude to the next Great Flood and the Second Coming of Noah.
Man I LOVE LAS VEGAS!
SunJon..your post makes no sense. Maybe I'm an idiot but what was your point?
"The reason 80 percent of the homes in Las Vegas are underwater is because this town has a memory about two months in duration."
HUH???
@sunjon
Plenty of people did get in and out multiple times. But you're right, using your house as an ATM was a losing strategy from the beginning.
good job, guys...apparently none of you are in charge.
...just a garden variety of morons without drivers' licenses.
Outside "investors" pushed up "home" values turning homes into investment vehicles.
Renters are slaves, so I guess we needed more unemployed slaves (strange operating system).
Jonny B is right, though...BIG flood on the way!
As long as the Zillow study's procedures are consistent from year to year, the study can be useful in spotting year over year trends.
The big trend in the report is that Vegas real estate prices continue to drop. The number of underwater owners is a side-effect. If prices rise, there will be a corresponding drop in underwater owners.
Also, as foreclosures proceed, and these foreclosed properties get resold at the current market price, the new buyer will soon be underwater IF THE PRICES CONTINUE TO DROP. They won't be underwater by as much as the previous owner, but still underwater just the same.
Prices will probably not begin to rise until the foreclosure inventory gets cleared. It's going to be a long haul along the bottom.
Glad that I'm in the 20%! I not only have my house paid off, but a rental property also paid off & rented out. I also don't have any need to sell either property. They will go back up in value, might take years, but it will turn around.
Video about collapse of the dollar and banking system, a bit over the top but quite entertaining.http:
//www.youtube.com/watch?v=AQv-sdMCClQ&feature=pyv&ad=5953390594&kw=end%20of%20liberty
Funny thing is the only people blaiming the government and the banks are the people who got themselves into trouble. The posters who are not in trouble or just plan on living in their home for the duration are not whining. As balin Plain and their hero Mangle says, "Man Up". For those who blame Reid this started before he was in the majority party.
Zillow isn't that accurate. They overlook lots of details and use comparisons that sometimes aren't so "comparable".
Do some of you think 80% of the population of Las Vegas were flipping homes? Some of that 80% played by the rules - and are victims to the PONZI of Wall St. and Barny Frank. Of course - there is no sympathy for the flippers who got stuck holding a mortgage when the music stopped, but many played by the rules. They sit in the smoldering wreckage of the USA bus -- wondering why they had to ride off the cliff with the rest of the clowns!
Then, how about a stinging five-finger SLAP to the face when Goldman Sachs was paid 100 cents/dollar by every taxpayer in America - when they where the machine that perpetuated the bubble and meltdown!
I keep waiting for someone to write a book -
"How less than 99 people sank America"
Seriously - I bet there are less than 100 people"CEO-types, bankers, congressmen, hedge-funds and surfing for porn SEC executives - that became a defacto Fifth column for Al Qaida -
Sure, we hate the realtors (I am just glad they never returned my phone calls in 2005).
Mostly because they let Clark County be OVER BUILT...
and they diluted the Casinos as well.
It will NEVER COME BACK........
NativeNevadian
Just curious who are "THEY"?
I can relate to being underwater on our house, but I was able to make my payment when we bought our house and as long as I am financially able to make our house payments, I will...
"No one Ever Promised Me a Rose Garden"
Too bad there are not more LarryVegas's and the other that posted here like Larry instead of the whiners like primetime and the others who were in over their heads from day one.
Few things got us into this mess. The appraisers hired by the banks, hyped the value, since it benefitted them and the mortgage bankers. The bankers lent money on "paper equity" and people spent it on basic neccesities-like hummers, suv's and Alaskan cruise.
"Pure hate from those on the Left..."
And Larry is such a warm and sweet guy :P
Just kidding - anyway, I happen to agree with Larry. It's your home, if you want your home and can afford the payments you should keep it.
I was lucky and just bought a house last month. I couldn't afford one before now, since I can do math, and realized that my salary will not get me a 350k house, so hopefully it worked out for the best.
LV had a choice and the majority re-elected Sen Reid. Poor choice.
As long as there remains property taxes, home ownership is an illusion - with the reality being all "private" property is leased/rented from a government landlord posing as a representative of "the people".
: {
Jenlv is such a sweetheart...
Unfortunately, we purchased our home in September of 2006, which was about the high-water mark for Las Vegas house prices. In order to make our mortgage payments affordable, we made a 40% down payment.
Today, we owe more on our house then it would currently sell for. But we did not purchase our house as an investment. We bought it to live in and enjoy.
Since we do not plan on selling our house, our sons can figure out what to do with the house when we retire to the promised land.
Living up to one's obligations, especially in time of difficultly, builds character and integrity...
That's all folks...
dippy; it's got to be Harry's fault. We have to blame Harry. If we blame Barry, we will be called racists...
I'm sorry Larry, that sucks. I'm glad you love your home though and aren't bailing...
See, we can all get along!! :) ugh.. didn't see your last comment...
dippy and I communicate on a special frequency that only those who have had an lobotomy can receive...
what a joke some of you are. when i moved here in 2004 i paid 260k for my house. I would be lucky to get 100k now. I never took any money out etc.. Its a business not something personal to walk away. sooo many people are going to walk away next year!!!
@ECHAZARD
as I said: "I just did a word search in 33 comments for the word "Bush" and did NOT FIND ONE INSTANCE of the name. However, I did find Harry at least once."
Being underwater has nothing to do with ATMs, nor have I ever used my house as an ATM. You must get your information from the same source as Glenn Beck, who must grab his head with both hands and pull straight down just to see daylight.
People, please listen to me.
If you are short selling your home, DO NOT USE A REALTOR THAT DOES NOT EMPLOY A LAWYER TO GO OVER YOUR APPROVAL LETTERS. If you choose to use a realtor that does not use a lawyer, then please hire one yourself.
DO NOT TRUST YOUR REALTOR TO DO THE JOB.
Many, many people are short selling their homes right now without getting the proper releases from the bank. Almost all attorneys agree, if the bank does not explicitly waive its deficiency, you are better off foreclosing. But bad realtors won't tell you this because all they care about is getting their fee.
Ok I have read all comments from top to bottom, If you lived on BORROWED money and lived BEYOND your means and YOUR under water in your house its YOUR fault. Now with that said the BANKS should take every house and EAT them cause they made the crazy LOANS now I need to go back overseas cause thats where the jobs are Happy Holidays everyone
People who were just looking to flip, treat their house like an atm or bought a house 2-3 or more x what they could afford, please, you can all go back to socal anyway, we dont want or need you here. you're horrible drivers anyway, and I am tired of being tailgated. maybe you can sell back your latex implants to help offset the travel costs? buh bye!
And on the other side...if I'm an investor in the lender I expect the loan to be no more than a certain percentage of the asset securing the loan.
If that percentage changes the note should be re-written to reflect that acceptable percentage.
So if you are underwater the bank is (eventually) required to recall the note and rewrite it to reflect the current value.
Don't worry, Harry will fix this! After all we just voted him because he can fix a mess like this right! LOL http://aBadReid.com
Reality Check: We are all slaves, including the politicians, all people, the world over, not just here in the United States.
Our one way to freedom: dismantle the Federal Reserve Bank, which is privately owned.
From cradle to grave, the Federal Reserve Bank is the ALL POWERFUL MASTER.
In over 2 centuries, no one has figured out how to break free of them. So there will be few things that are subject to improve while one is alive. Like you all are saying: do we really own our homes? No, the government will if we don't pay taxes, and a mortgage holder does if we don't make the payments. It's an illusion at best.
Hey aBadReid, when are you going to open up your sister site aSoreLoser? It amazes me how the people who want government out of their lives are quick to blame everything on the government. You would think they would have distanced themselves years ago.
As others have mentioned in this comment section, no government official stuck a gun to your head and made you sign on the dotted line.
Some members of the family got out of the bubble in 2006. Others decided to keep their homes. Win some lose some. Luckily, the ones who kept their mortgages earn enough to cover the monthly payment. I would love to see an article on the percentage of 'homeowners' who are making their monthly payment. An underwater mortgage is no big deal as long as you can make the payment.
"Living up to one's obligations, especially in time of difficultly, builds character and integrity..."
Yea, if you don't drown in the meantime...
ensign, Sandoval, Heller and Heck are of no help. Only government can fix this. The no party is doing nothing.
At least Titus tried to help.
The Bush ownership society caused this situation, a long with deregulation.