Home prices dropped in 24 of 25 U.S. metropolitan areas in July, led by declines in Las Vegas and the coastal cities of California, as foreclosures depressed prices and accounted for a fifth of all sales.

Las Vegas had the biggest drop on a per-square foot basis, falling 33 percent in July from a year earlier, New York-based real estate data company Radar Logic Inc. said in a report today. Los Angeles, Phoenix, Sacramento and San Francisco each dropped about 28 percent. Three of the five worst-performing markets were in California.

“Buyers are increasingly reluctant,” Radar Logic Chief Executive Officer Michael Feder said in an interview. “There has been an awful lot of talk about the declining of the housing markets.”

Foreclosed properties accounted for about 21 percent of sales in July, up from 5.6 percent a year earlier, the report said. U.S. foreclosures rose to a record 2.75 percent of all mortgages in the second quarter, according to the Washington- based Mortgage Bankers Association. Foreclosed houses tend to sell at a discount of about 20 percent, according to research by Lehman Brothers Holdings Inc. Those discounts are weighing on prices throughout the country, Radar Logic said.

The U.S. Senate passed a $700 billion financial-market rescue package yesterday loaded with inducements for the House of Representatives to approve the measure. The House rejected an earlier version.

`Dramatic Impact’

The legislation, approved last night on a 74-25 vote, authorizes the government to buy troubled assets from financial institutions rocked by record home foreclosures. It contains two provisions favored by House Republicans: One raises the limit on federal bank-deposit insurance; the other reiterates the authority of securities regulators to suspend asset-valuing rules that corporate executives blame for fueling the crisis.

“As you clear out the discount inventory, it is going to come back,” Feder said of the housing market. “The bill that’s struggling through Congress could have a dramatic impact.”

House prices in 20 U.S. cities declined in July at the fastest pace on record, according to an S&P/Case-Shiller report issued on Sept. 30.

The S&P/Case-Shiller home-price index dropped 16.3 percent from a year earlier, more than forecast, after a 15.9 percent decline in June. The gauge has fallen every month since January 2007, and year-over-year records began in 2001.

U.S. foreclosures have come in three waves, Moody’s Economy.com Chief Economist Mark Zandi said this week.

Foreclosure Waves

The first hit in early 2006 when investors who bought houses intending to quickly resell them for a profit realized the boom was over and walked away. The second came a year later as owners who used adjustable-rate mortgages to buy in 2005 and 2006 began to see their monthly payments rise. Now, falling home prices combined with rising unemployment have spurred a third round, Zandi said.

In Los Angeles, foreclosures accounted for 34 percent of all sales in July, in Phoenix it was 33 percent, in Miami it was 14 percent, and in New York it was 3 percent, Radar Logic said.

The biggest price declines were in the California and southwestern states, according to the report.

Prices dropped 26.5 percent in San Diego from a year earlier, 24.1 percent in Miami, 17.9 percent in San Jose and 17.4 percent in Tampa, Florida, the report said.

Milwaukee Rises

Only Milwaukee saw home prices climb in July, rising 2.9 percent since July 2007. Prices have risen 3.6 percent there in the last two years. The only other city to see an increase in that period was Charlotte, North Carolina, which rose 1.5 percent.

“They didn’t have the same boom, and their economy is somewhat more stable,” Feder said of Wisconsin. “They are, to some degree, not suffering the bust.”

In the New York metropolitan area, prices fell 7.8 percent in July from a year earlier and in Boston they fell 13.6 percent, Radar Logic said.

The RPX Monthly Housing Market Report, published by Radar Logic, measures home values using price per square foot. The data reflects 28-day aggregated values, the company said.

The prices are the basis for property derivatives traded on the Residential Property Index, which has a volume of $2 billion. The index allows investors to benefit from the movement of metro area home prices without owning land or physical property.

Credits: Bloomberg

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Some of the fliers circulating in North Las Vegas this week invite residents to the city’s annual hot-air balloon festival, BalloonaPalooza.

Other fliers address an issue that’s more of a downer.

The handouts invite residents to a seven-hour workshop dealing with the foreclosure crisis.

Nevada leads the nation in the rate of foreclosures, and North Las Vegas is the eye of the storm. In August, there were more than 800 foreclosures in the city.

That’s only the latest bad-news figure in the ongoing market downturn.

In the second quarter of this year, 12,000 Nevada homes went into foreclosure, and the crisis is expected to continue for at least a year. A study by the Pew Center on the States projected one in 11 Nevada homes will enter foreclosure by the end of 2010.

Some of the newest housing developments in North Las Vegas, including Eldorado and Aliante, had the highest foreclosure rates in the valley at 11 percent to 14 percent from Sept. 1, 2007, to March 31, according to a Sun analysis.

In Aliante, a master-planned community still being developed, nearly one in seven residential properties has gone into foreclosure since last fall.

Against this backdrop, City Hall is telling residents it is not too late to get help.

Buddy Yates, a 60-year-old pastor living in North Las Vegas, says he is one of the homeowners who will be seeking help at the workshop, which will be held from 10 a.m. to 5 p.m. at Texas Station.

He’s working with his lender to lower his $2,365 month payments.

Yates said he went to a workshop in July at Cashman Center that proved fruitless for him.

Saturday’s workshop, officials promise, will be different. It’s the first time North Las Vegas City Hall has addressed the foreclosure crisis head-on, by gathering the nonprofit Consumer Credit Counseling Service, the Department of Housing and Urban Development and the Federal Housing Administration.

“We needed to gear something directly to someone looking at possible foreclosure,” said Kenny Young, an assistant city manager. “Some of the other workshops are more geared toward the lenders.”

Young said not everyone can be helped, but city officials want to at least try.

The city is in the midst of redeveloping its downtown as its northern sections continue to blossom. However, the continued market slump is undercutting development success the city has enjoyed in the past decade.

“We need to stabilize neighborhoods for the people living here,” Young said. “Once we have that we can move forward with the growth in our community.”

Job No. 1 at Saturday’s workshop will be to explain the foreclosure process to beleaguered homeowners. The agencies will also provide a checklist of the documents people need when meeting with a lender in their efforts to renegotiate their loans and avoid foreclosure.

“People look to the government in times of need,” Young said. “This is definitely one of those times.”

Credits: Las Vegas Sun

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Home foreclosures and delinquencies were above the national average in the second quarter in eight states, including Nevada, the Mortgage Bankers Association said today.

The association’s report indicated more than 4 million homeowners nationwide with a mortgage — a record 9 percent — were behind on their payments or in foreclosure at the end of June. The source of trouble in the mortgage market has shifted from subprime loans made to borrowers with poor credit to homeowners who had solid credit but took out exotic loans with ballooning monthly payments.

Almost 500,000 homeowners nationwide, or about 1 percent, entered the foreclosure process in the second quarter.

RealtyTrac Inc. reported last month that one in every 106 households in Nevada received a foreclosure filing in July. More than 10,000 Nevada homes fell into foreclosure in July.

The Mortgage Bankers Association said eight states had foreclosure rates that were above the national average: Nevada, Florida, California, Arizona, Michigan, Rhode Island, Indiana and Ohio. The remaining 42 states were below the national average, and some states — including Texas, Massachusetts and Maryland — saw declines in the number of foreclosures in the second quarter of the year.

The delinquency rate is the highest ever recorded in the association’s survey. The increase in the overall delinquency rate was driven by increases in the number of loans 90 or more days past due. The 30-day delinquency rate is below 2002 levels.

Credits: Las Vegas Sun

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Southern Nevada’s self-storage market stayed robust during the first half of 2008, reports Marcus & Millichap, thanks partly to a softened residential market creating more transitional housing needs. Financing woes, increased foreclosures and a steady influx of new residents all translate into more self-storage activity, the Encino, Calif.-based real estate investment services company said.

“People moving between cities often store their belongings in self-storage,” said Alan Schlottmann, executive director of the Theodore Roosevelt Institute, an economic think tank with offices in Las Vegas. “Also, the new trend in housing is smaller and with less clutter.”

Roughly 3 million square feet of new self-storage space was completed throughout the West last year, with about half of all new projects occurring in California, Marcus & Millichap reported. The Golden State was responsible for nearly one-third of Southern Nevada’s 79,482 new residents in 2007. Many transplants rent and store their belongings in facilities while searching for permanent residences.

But with lenders still reeling from mortgage-related write-downs, it’s taking longer for new residents to attain home financing, which means extended storage rentals and higher occupancy rates. Storage rents consequently increased 6.1 percent last year across the West, averaging 94 cents per square foot, Marcus & Millichap reports.

Self-storage facilities raked in $20.1 billion in gross revenues last year, reports the Self Storage Association, an industry trade group holding its annual convention in Las Vegas from Thursday through Saturday. Nearly one in 10 households rents a self storage unit, occupying 17.2 square feet on average, which is a 65 percent increase from 12 years ago. There are 51,500 self-storage facilities in the United States, with a combined capitalization value of $220 billion.

“A lot of small, startup businesses use self-storage for their inventory,” Schlottmann said. “People operating home-based businesses through the Internet can also get inventory space through self storage.”

PROJECTS

Road and Highway Builders, LLC is performing a $46 million, 17.8-mile widening of U.S. Highway 95, from 2.5 miles south of Searchlight to the Laughlin Highway. It marks the fourth and final phase of expansion creating a four-lane divided highway. The project will finish in the summer of 2009.

AvroKO, the New York City-based design firm, recently completed the $20 million Lavo restaurant, lounge and nightclub inside the Palazzo, 3255 Las Vegas Blvd. South. The 20,000-square-foot facility has a 1,405-person capacity. Ludo Lefebvre, a James Beard Award winner, is the executive chef.

Burke & Associates completed the $6.5 million, 22,185-square-foot Nevada Partners Culinary Training Academy at 710 W. Lake Mead Blvd. in North Las Vegas. The facility, designed by SH Architecture, consists of a 5,880-square-foot banquet hall, a 1,232-square-foot restaurant, nine training suites and student locker rooms.

Burke & Associates is also performing a $3.4 million, 81,616-square-foot office tenant improvement for the Clark County Department of Aviation inside Marnell Airport Center, 1845 E. Russell Road in Las Vegas. Marnell Properties is the developer; KKE of Nevada is the architect.

Crisci Builders is performing a $3.2 million, 20,000-square-foot retail tenant improvement for ElevenSpa inside Town Square at 6611 Las Vegas Blvd. South. The project, designed by George Brewer Architecture of Delray Beach, Fla., will finish in mid-November

LM Construction Co. finished a $2.5 million, 14,000-square-foot showroom for American Stone at 3741 Civic Center Drive in North Las Vegas. Lynn Centner & Associates designed the two-story building.

Nigro Development is building a new $1.48 million, 5,550-square-foot Bank of George regional branch at St. Rose Parkway and Seven Hills Drive in Henderson. The project is scheduled to finish in April.

Trinity Retail Construction completed a 4,320-square-foot tenant improvement for Mattress Firm inside McCarran Marketplace at 5775 S. Eastern Ave. in Las Vegas. The new store will create seven jobs. Castle’s Design Group was the architect.

MILLION DOLLAR DEALS

Ryder Truck Rentals bought 5.07 acres of vacant land at 8010 W. Post Road in Las Vegas for $6.3 million or $1.2 million per acre, from Southwest Acquisitions, LLC. Colliers International’s Daniel Doherty, Patti Dillon and Laura Hart represented the seller.

Kravitz, Schnitzer, Sloane & Johnson signed a seven-year, $3.042 million lease for 15,731 square feet of office space inside Beltway Corporate Center at 8985 S. Eastern Ave. in Las Vegas. CB Richard Ellis’ Randy Broadhead represented the lessor, Beltway Corporate Center LLC. The reported average rent equals $2.30 per square foot.

Community Bank of Nevada signed a 10-year, $1.8 million lease for 3,500 square feet of retail space at St. Rose Parkway and Coronado Drive in Henderson. Colliers International’s Rhonda Panciro, Grant Traub, and Keith Cubba represented the tenant. The reported average rent equals $4.28 per square foot.

Whiting Turner Contracting Co. signed a six-year, $1.249 million lease for 5,912 square feet of office space inside Marnell Corporate Center at 6720 Via Austi Parkway in Las Vegas. CB Richard Ellis’ Jayne Cayton and Bret Davis represented the lessor, Marnell Properties LLC. The reported average rent equals $2.93 per square foot.

Rhodes Design & Development Corp. signed a three-year, $1 million lease for 12,629 square feet of office space inside Colonial Bank Plaza at 4730 S. Fort Apache Road in Las Vegas. Lee & Associates’ Charles Witters, David Flynn and Kris Watier represented the lessor, REEF Colonial, LLC. The reported average rent equals $2.29 per square foot.

Credits: Las Vegas Business Press

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