By Kurt R. Mattson
Anyone in the United States who felt the effects of the 2008 mortgage crisis hopes by now it’s finally over, and nowhere is that announcement more enthusiastically (and eagerly) awaited than here in the valley.
The story for the past few years is that Nevada has the nation’s second-highest residential foreclosure rate; however, there’s evidence that things are looking up as the most recent numbers may be telling a brighter story.
The Greater Las Vegas Association of REALTORS® (GLVAR) recently reported the Southern Nevada housing market was continuing to enjoy steady growth this spring, as home prices and sales in the valley increase from a year ago.
According to RealtyTrac reports, the Las Vegas foreclosure rate is still higher than the national rate of 1.43 percent, but this rate has decreased in the past several months. Also, the volume of mortgaged homes in the Las Vegas metro area in the foreclosure process fell to 2.36 percent in February 2015 compared to 3 percent a year earlier, and had fewer mortgaged homes with loan payments more than 90 days past due (5.76 percent in February compared to 7.76 percent a year ago). This means fewer area homes are headed into foreclosure.
One statistic clouding all that sunshine is from April 2015, when the number of foreclosure filings in Las Vegas was 9 percent higher than the previous month, and 37 percent higher than the same time last year. It’s important to point out that foreclosure activity did rise nationally, with a spike in repossessions by banks. That was expected by the industry. RealtyTrac says the April repossession increase was forecasted by a 23-month high in scheduled foreclosure auctions in October 2014. The scheduled auctions are now taking place, and properties are going back to foreclosing lenders.
Other than the predicted bump, foreclosure starts are decreasing in Las Vegas and are currently below pre-crisis levels nationwide. The foreclosure activity in April, experts say, was part of the clean-up from 2008, not the start of new trouble.
Home prices in the Las Vegas metro area rose by 6.8 percent in April compared to the same time last year (the median home value in Las Vegas is $180,300). Zillow forecasts these prices will rise 4 percent within the next 12 months. In other good news, GLVAR has seen fewer distressed sales and more traditional home sales. In April, 7.2 percent of all local sales were short sales, which is down from 8.3 percent in March and from 12.4 percent in March 2014.
Another positive for the Las Vegas housing market is that new housing development is growing—particularly in the southwest, Summerlin, and in the northwest valleys—with billions in new building projects and renovations said to be planned for the next few years.
In addition to positive trends in residential real estate, commercial foreclosures have slowed down significantly in the past several years, says Matt Watson of Childs Watson & Gallagher.
“The loan portfolios of failed institutions, such as Silver State Bank, have been liquidated for the most part,” says
Watson, who practices in leasing, real estate development, and finance. “There has been some thought that with the coming maturity of CMBS loans, there may be another wave of foreclosures; but in my practice, I have seen a large number of re-financings to retire that maturing debt as property values recover.”
Watson doesn’t anticipate commercial foreclosures in Las Vegas to reach the levels we saw in the early part of the decade.
The 2008 mortgage crisis is still having some lingering effects in the valley, but reports on residential and commercial real estate are positive by most accounts, if cautiously so. For the next few years, the forecast for the market in Las Vegas looks at least partly to mostly sunny.
Kurt R. Mattson, J.D., LL.M., is the former director of Library Services and Continuing Education at Lionel Sawyer & Collins in Las Vegas. He is now the president of Union Legal Research—a marketing, writing, and research company catering to the needs of law firms and businesses in the Southwest. He can be contacted at email@example.com.