The housing crash in Nevada is far from over, despite a feeding frenzy on foreclosures. A flood of adjustable rate mortgage resets will send more foreclosures on to the market for sale. But conditions in the housing market are at least improving in Nevada, which had more bad mortgages made in the nation per capita than any where else.
A foreclosure feeding frenzy is attracting buyers in Las Vegas, where foreclosures compose nearly three-quarters of all home sales. The discounted properties are accounting for new record numbers of home sales monthly. However, the median sales price is low, hovering around $140,000, indicating that the first time home buyers federal tax credit and other government incentives are boosting the marketplace.
The median price of a home has dropped more than half since the markets peak. But the inventory of Las Vegas homes is rising as a result of foreclosures. Many aren’t listed by real estate agents and are sold at auction or over the Internet.
Las Vegas, North Las Vegas and Henderson have formed a consortium to apply for a second round of government funds from the federal government’s Neighborhood Stabilization Program to improve the local economy. The program is part of the government’s $787 billion federal stimulus package. Housing Predictor forecasts Las Vegas home prices will sustain average housing deflation of 21.7% in 2009, a full six-percent less than forecast the beginning of the year due to the larger than expected volume of sales.
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|---|---|---|
| City | Forecast | |
| Las Vegas | − 21.7% | |
| Henderson | − 18.8% | |
| Reno | − 17.2% | |
| Lake Tahoe | − 15.0% | |
| Carson City | − 13.8% | |
Investors compose a large part of home buyers in Las Vegas, who are also buying in Henderson, which has seen builders stop the construction of many new housing developments in their tracts. The market just couldn’t absorb any more homes at the height of the boom. Henderson is forecast to sustain average housing deflation of 18.8% in 2009.
In Reno fallout from the financial crisis has also been severe, where homes have deflated at double-digit rates. Foreclosures and increasing walk-aways by homeowners with growing negative equity are troubling the local economy. The number of vacant homes in and around Reno are increasing and adding to the surplus of 2.1-million homes sitting vacant throughout the nation. The sell-off will take a number of years in Reno, which grew to one of the most over-built housing markets in the country, and is forecast to deflate 17.2% for the year.
In neighboring Lake Tahoe in the Sierra Nevada Mountain range, a second home market dominates the area. It started deflating much later than many other vacation resort markets, and is now suffering through what is projected to be the worst downward spiral in Tahoe’s illustrious history. Home and condo prices are taking a bruising. Housing values are certain to fall further before financial markets find their footing. Lake Tahoe average housing values are forecast to deflate 15.0% in 2009.
In Carson City the economy counts on tourists to hit the slopes of neighboring Lake Tahoe’s many snow ski resorts. Buying at or near the top of the market has become a costly lesson for many. The downward spiral is hurting as foreclosures climb. Prices will be cut by a forecast 13.8% in 2009.
Tags: forecast, Housing, Las Vegas, market crash, Nevada, overview, real estate, Reno