Sin City is still feeling the brunt of the real estate bubble bursting. A new report has shown that housing prices are still retracting and the slew of real estate owned (REO) properties is the most likely cause of the movement. According to a market condition report from Nevada Title Company, home prices are continuing to decline in the area as bank owned properties are plentiful, and these properties already feature reduced prices and are negatively impacting the housing market as a whole.
History of Las Vegas' Weak Housing Market
Towards the conclusion of 2007 Las Vegas, Nevada earned the unfortunate title of being one of the markets considered to be ground zero for the foreclosure crisis. According to statistics produced for CNNMoney.com by RealtyTrac, out of the 100 zip codes researched for foreclosure statistics, seven areas were in the city of Las Vegas.
That problem was just the beginning of the state’s real estate woes. In 2009, Forbes.com dubbed Las Vegas as one of the "riskiest cities" for homeowners and the volatile nature of the local market were cited as some of the reasons. In July 2010 Forbes reported that throughout the state, 10 percent of all homes were 90 or more days late in relation to mortgage monthly payments and nearly 9 percent of all local homes were in foreclosure.
The local real estate market problems were created by a perfect storm of over development and home purchases financed with toxic mortgages. During the boon times of the local real estate market, an abundance of housing was built and a large portion of homes were purchased using subprime mortgages. As the true nature of the subprime mortgages were exposed, the real estate market was shaken to the core and thousands of mortgage owners defaulted on loans and lenders became the primary property owners throughout Sin City.
REO Properties Abundant in Las Vegas
Within the Las Vegas metro region, thousands of properties are now bank owned and currently listed for sale. It is because of that surplus of industry and a limited home buying base that is forcing a further retraction in current REO value. According to Reoi.com, in August, the median listing home price for a Las Vegas home was $140,000, but the average closing price of $127,000 was around 10 percent lower than the starting point.
As these values decline, the odds of the entire market retracting are increased. While there are plenty of bank owned properties in the state, private sellers are also trying to unload their homes. In order to stay competitive with the discounts being offered on foreclosed properties, sellers are reducing the listing prices of their homes. It is this cycle that is holding back the recovery of the local housing market.
Section 8 Helping Las Vegas Homeowners
Historically, the government Section 8 Housing Program has successfully providing affordable living accommodations to those in need and because of current market trends, the Las Vegas property selection list has never been so lush with options. In the past, most Section 8 properties were located in the undesirable areas of a town, but some luxury homeowners in Las Vegas are now offering their properties as part of the program as a way for them to avoid losing their investments to foreclosure.
According to the Wall Street Journal, the Las Vegas, Nevada is a hotbed of Section 8 activity because of the affects of the mortgage meltdown. Local homeowners are tapping into the power of Section 8 laws and converting their properties as a way to fill vacant homes, generate income and stabalize local communities. Thanks to the lingering effects of the real estate bust, Las Vegas based McMansions are now realistic housing options for those in need. It is not uncommon for Section 8 tenants to be able to find newly constructed homes complete with swimming pools, granite counter-tops and other luxury amenities.
For those who have ever dreamed of owning property in Las Vegas, now is the time to act. Not only do residents of the state experience the joy of no income tax, affordable housing opportunities are ripe for the picking. No matter if you are interested in buying a new or previously owned home, Mortgage Marvel is the industry leader that can provide you with accurate mortgage rate information in real time and without requiring your personal information.
