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April 20, 2014

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Percentage of underwater homeowners in Vegas drops in 2012

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Sam Morris / Las Vegas Sun file

Houses sprawl across the Las Vegas Valley. When the housing bubble burst in 2007, Las Vegas became the No. 1 area in foreclosures nationwide.

The percentage of underwater homeowners in Las Vegas Valley fell last year as rising home values gave many people a financial lift.

But there’s ample room for improvement: Las Vegas is expected to stay the underwater capital of America for at least another year.

About 59 percent of local homeowners with mortgages were underwater — meaning their debt exceeded their home’s value — at the end of 2012, according to a report out today from Zillow.

That’s down from 70 percent a year earlier but still highest among the country’s 30 largest metro areas. Atlanta was second-highest at 49.5 percent.

The valley’s rate of underwater borrowers is expected to dip by year’s end to 56.7 percent, Zillow said. It’s a slight improvement, though Las Vegas would remain worst in the nation, followed again by Atlanta, at nearly 48 percent.

Nationally, 27.5 percent of borrowers were underwater as of Dec. 31, down from 31 percent a year earlier. It’s forecasted to inch down to 25.5 percent by the end of 2013.

Zillow attributed last year’s sliding national rate in part to the 5.9 percent increase in U.S. home values in 2012.

Southern Nevada’s median home value rose 14 percent last year to $129,100, according to Zillow.

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  1. You mean to tell me that short sales had nothing to do with the lessening of the pool of underwater borrowers?

  2. My next door neighbor, a nice guy bought his house for $306,000. Problem was that the house had originally sold for $150,000 in 2001. Funny thing is that he is a construction superintendent. His wife is a schoolteacher. They just moved out, and I'm sure they didn't get a short sale. They just bailed out. It's listed for $140,000 with a view of the Strip. My point? Don't assume the good times last forever. They don't, and I'm sure he didn't have a window to throw it out. Ah, experience pays off.

  3. Another propaganda piece. Don't you believe it. My whole neighborhood is still underwater except those who bought as short sales and foreclosures. Zillow.com is not an authority or solid reference. Even they have disclaimers.

  4. @Scouser: But the prices will NEVER get as high as they were back in the boom days. BTW - many areas of the country already have seen rising prices and the prices keep going up.

  5. IF you could afford the house when you bought it and you're still in it, you can stay. Your choice to walk and take the hit on credit rating (and lose chance of home ownership any time soon) or stay until values improve to where you have equity. So if you remain in the Vegas area, your choice to live in this house or be a renter. Even in good times, some portion of mortgages go south--job loss, serious health crisis.... Sure, there are neighborhoods that were built on speculation. Just like many people bought resales on spec. Many to most of those people have moved on already. Anyone left staying in a house and NOT paying the mortgage needs to be dealt with pronto. Let's home the Legislature fixes the fiasco they created restricting NEEDED foreclosures. Those who keep paying, best wishes.