I felt this was a well written and balanced view of one of the hardest hit real estate markets in the USA. If Vegas can bounce back (and I believe it will), there is hope for the rest of us!
Housing legislation could spur quicker Las Vegas rebound By Brian Wargo / Staff Writer
As the infancy of a recovery takes shape in the Las Vegas housing market, builders and analysts are counting on a $300 billion housing rescue bill to accelerate any rebound.
Congress approved legislation that allows homeowners to avoid foreclosure by refinancing mortgages into fixed-rate loans insured by the Federal Housing Administration.
That’s welcome news for Nevada, which for more than a year has led the nation in the number of foreclosure filings per household. More than 11,100 homes have been repossessed in the first six months of this year, bringing home prices down to their lowest level since the housing boom started.
The Standard & Poor/Case-Shiller index released this week shows Las Vegas recorded its worst drop in prices in May with a decline of 28.4 percent compared with May 2007. That’s slightly higher than the roughly 20 percent drop reported by local housing analysts.
The price drops have been sparked by foreclosure sales and short sales in which homeowners seek approval from banks to sell a home for less than is owed on the loan. About 60 percent of the 2,979 existing-home sales in June were banked-owned homes with a median closing price of $203,000 - $22,000 less than nonbank-owned homes.
IN BUSINESS LAS VEGAS
Not only will the legislation help stem the tide of foreclosures, but builders are applauding a tax credit provision that would provide as much as $7,500 to those purchasing their first home.
The bailout will reduce the number of foreclosures and short sales and further reduce the already declining inventory of existing homes, said Tom McCormick, president of Astoria Homes. With fewer homes for people to choose from and a $7,500 credit that will help them cover their down payment, it provides a welcome boost to the new-home market, he said.
“It is going to create some urgency in the market,” McCormick said. “I think it does everything that Las Vegas needed. I am not saying it does that for the rest of the country. I feel like the market is getting better and that will only help make that happen.”
Although existing-home sales increased in the second quarter compared with 2007’s second quarter, the new-home market has remained stagnant. In June, 922 sales, for example, were 50 percent of June 2007’s total.
McCormick said sales picked up in July as buyers said they were tired of losing out in the foreclosure bidding process. Second, the quality of the foreclosure properties available has lessened as well, he said.
Las Vegas housing analyst Steve Bottfeld, executive vice president of Marketing Solutions, also applauded the housing recovery bill as a measure that will improve the Las Vegas market. It could be as early as this fall when new-home sales exceed foreclosures and help that market recover in 2009, he said.
The existing-home market is already recovering because sales have increased for four consecutive months, he said.
One Comment
Even though we are told of instances of foreclosure in terms of statistics, to so many, it’s a story of a family member or friend that they know.
I’m not sure who to blame - the owner who could’ve taken different actions to avoid foreclosure or the banks and government who do such a poor job of keeping homeowners informed with all their small-print info.
It’s a spiral where everyone is chasing and blaming someone else. But one thing that we all can agree on in difficult times like this is that it’s a downward spiral that is collectively drowning us as a whole nation that once was prosperous and less wounded.
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