The Las Vegas Review Journal had another article published about Las Vegas real estate market last week and here are a few excerpts:
“Two reports showed that more than half of home mortgages are underwater, meaning the owner owes more than the property is worth, according to two reports.”
“Zillow.com reported that 81.8 percent of Las Vegas home borrowers are underwater”
These lines scare the heck out of prospective buyers and make those who were SMART ENOUGH to buy feel bad. So I have decided to go back a few months and see how these predictions and fear mongering worked out by now.
Below are a few headlines from March and May 2009
“REAL ESTATE: Loan delinquencies soar for Nevadans, Nevadans behind on mortgage payments push state to top of national list
About one in eight Nevadans is now behind on their residential mortgage, new data from the Mortgage Bankers Association show. It’s probably an indication that more foreclosures are on the way for Nevada, which ranks first nationally in mortgage delinquencies and first in foreclosures started in the first quarter.
RealtyTrac showed Nevada foreclosure activity was down 18 percent in April from the previous month, but increased 111 percent from a year ago.” Las Vegas Review Journal May 29, 09
“The first-quarter total of 13,642 is on pace to shatter last year’s record 31,416 foreclosures for 2008 in Clark County, Sacramento, Calif.-based Foreclosures.com reported.” LVRJ April 17th, 2009
What would a reader expect to happen by now, a big increase in the number of homes that are foreclosed and put on the market by the lender? Well this is not what happened in reality.
Actually the number of properties that have been foreclosed by the lender in Las Vegas Valley which went to the bank is lower in 2009 than 2008.
2008 Foreclosed properties that went to the lender 31,146
2009 Foreclosed properties that went to the lender by Dec-7th 28,189
The most important factor in Las Vegas residential real estate market,
I will repeat one more time. The most important factor in Las Vegas residential real estate market is:
The number of properties that are foreclosed by the bank that go back to the bank versus the number bank owned properties which are sold through Las Vegas MLS every month.
If the number of monthly foreclosures is greater than the number of bank owned properties sold through MLS then prices will go down. If they are nearly equal, we have stable pricing and if more sell on MLS than are foreclosed then we will have rising prices.
No more, no less.
Now let’s look at these numbers for the last month and last three months.
| Number of homes and condos | Homes, condos and Townhomes foreclosed by the banks | Bank Owned homes and condos sold through MLS | Total number of homes, condos, townhomes sold through MLS |
| Sep-Oct 2009 | 2563 | 2952 | 4396 |
| Oct-Nov 2009 | 2610 | 2839 | 4401 |
| Nov-Dec 2009 | 1398 | 2485 | 4066 |
| Dec 1-7 2009 | 262 | 355 | 645 |
As you can see, 8165 Residential properties have sold through Las Vegas MLS while 6417 have been foreclosed and went back to the bank.
It is easy to scare people to gain publicity or sell newspapers, however if one looks back six or nine months, it is easy to see that a 110% increase in number of foreclosures not only did not materialize, it actually went down. However, the biggest asset a stupid analyst or a site like forclosure.com has is a short memory.
In conclusion, I have been doing a bit of fear mongering myself about the impending tsunami of commercial real estate foreclosures which should have been well underway by now, it is not materializing either, but more on this later.
Related web site links: Las Vegas homes, condos, land and commercial real estate, Las Vegas homes for sale, Las Vegas condominiums for sale, Las Vegas residential real estate news
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