Las Vegas Foreclosure Rate Giving Blackjack Tables Company!
Often called the "Entertainment Capital of the World," Las Vegas is an international hotspot for vacationers, gamblers, entertainers and shoppers. Of a less noteworthy distinction, this city has also become one of the top areas in the country for foreclosures.
According to data compiled by the California foreclosure tracking firm RealtyTrac, Las Vegas was seventh for U.S. metro areas with the highest foreclosure rates in 2006. Specifically, more than 19,000 homes entered Las Vegas foreclosure last year.
Las Vegas foreclosures peaked in the fourth quarter of 2006. From October to December of last year, approximately 6,295 homes entered Las Vegas foreclosure. By the end of 2006, there was one Las Vegas foreclosure per every 31 households.
This number is especially alarming when looking at 2006 first-quarter figures for Las Vegas foreclosures. There were 4,972 reported Las Vegas foreclosures from January through March. When broken down, this number averaged out to one Las Vegas foreclosure per every 140 households. In nine months, the Las Vegas foreclosure rate per household rate moved up 109 spots.
Unfortunately, Las Vegas foreclosure rates magnify a larger problem in the state of Nevada. Among states, Nevada foreclosures ranked just behind Colorado and Georgia in 2006. Nevada foreclosures were up 172% percent last year, and the first month of the New Year was another bad sign.
Nevada replaced Colorado as the state with the highest foreclosure rate in January. Specifically, Nevada foreclosures increased eight percent from December, according to RealtyTrac numbers for January.
There were approximately 2,397 new Nevada foreclosures in January. When broken down, there was one Nevada foreclosure for every 362 households in the first month of 2007.
Reasons for Las Vegas Foreclosures: Is There Any Relief in Sight?
So what factors have contributed to the high numbers of Las Vegas and Nevada foreclosures over the last year, and what can be expected for the rest of this year?
Las Vegas foreclosures have been attributed to various factors, most notably sub-prime loans, speculative buying, more homes on the market, the depreciation of existing homes, and a struggling real estate market.
Sub-prime loans have become a growing concern in not only Las Vegas but also the entire country. Basically, a sub-prime loan allows a person with a less-than-stellar credit history or other financial red flags to purchase a home at a lower price. However, by getting in on home ownership at a lower price, these buyers are subject to rising interest rates on their mortgage payments over time. It has been estimated that the high-interest rates of sub-prime loans will lead to 2.2 million U.S. foreclosures in the next couple of year.
With that said, one real estate expert in Nevada expects foreclosure rates to increase in the Silver State in the next couple of months because of such rising mortgage payments. Michael Krein, president of Nevada Real Estate Services, said in a recent InBusiness Las Vegas article that the jump in mortgage payments for many homeowners in the state will not occur until this year and that it may be a while until foreclosures in the state peak.
Speculative buying is another attributed culprit for Las Vegas foreclosures. Speculative buying entails someone purchasing a property with the intention of letting it appreciate and then quickly selling it off to make a profit. Speculative buying is big in cities like Las Vegas and Miami because of their many attractions.
With that said, Las Vegas homes have actually been depreciating due to several factors, including an oversupply of new homes last year and more resale homes on the market. According to a figure in a February InBusiness Las Vegas article, there were 24,000 single-family homes, condos and town homes on the market in January, a month which saw home closings in this city fall to its lowest point since May 2004. One expert in the story said that he does not expect the supply of Las Vegas homes on the market to reach a healthy level of 15,000 until at best 2008!
So what does this mean for homeowners facing Las Vegas foreclosure? With more homes on the market, it becomes even more difficult for distressed homeowners to sell their properties. This problem only intensifies when Las Vegas homes are currently not selling as well as in the past.
Facing Las Vegas Foreclosure? What To Do Next!
If you're worried that your Las Vegas home is going to be foreclosed on, you should speak with a local attorney as soon as possible. An experienced attorney in your area can assess your current financial situation and help you determine if refinancing, debt workout plans, Chapter 13 bankruptcy or other foreclosure options may help you keep your home.