Owners of more than half of all homes sold in the Las Vegas area in the past five years have negative equity in their homes, according to a new report.

The report from Zillow.com, which tracks real estate values across the country, indicates that home prices in the Las Vegas area have fallen to levels not seen since 2003, and homes sold for a loss in the second quarter of this year made up 69 percent of all home sales.

According to Zillow, the average home in the region — including single-family homes and condos — is valued at $205,500, which is down more than 27 percent from a year ago, and down more than 34 percent from the market’s peak of $313,275 in the first quarter of 2006.

The report indicates that 99.4 percent of homes lost value in the past year.

Among the report’s other findings:

- More than 48 percent of homes sold in the Las Vegas area in the second quarter of 2008 were foreclosures.

- About 70 percent of homeowners who purchased their homes in 2005, 2006 or 2007 have negative equity in their home. For example, about 73 percent of homes purchased in 2006 have negative equity, with homeowners having median equity of minus $52,444.

The full report is available here at Zillow.

Credits: Las Vegas Sun

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The foreclosure juggernaut lurched forward in July as banks took back 77,295 homes – up 8% in a month and 183% in a year, a report issued Thursday shows.

Total foreclosure filings – delinquency notices, auction sale notices and bank repossessions – were up 8% from June and 55% year-over-year, according to RealtyTrac, an online marketer of foreclosed homes.

One of every 464 U.S. households received at least one filing during July. And more than 680,000 homes have been repossessed by lenders since the beginning of August 2007, when the credit crunch hit.

“Bank repossessions, or REOs, continued to be the fastest growing segment of foreclosure activity,” said RealtyTrac’s chief executive officer, James Saccacio, in a statement. “The sharp rise in REOs, combined with slow sales, has resulted in a bloated inventory of bank-owned properties for sale.”

The company says it has more than 750,000 active listings of repossessed homes for sale on its database. That represents about 17% of all the existing homes for sale in the United States as reported by the National Association of Realtors.
Leading states

Foreclosure activity in Nevada, surpassing all other states, touched one in every 106 households in July. Foreclosures in the state were up 15% for the month and were almost double the rate of last July.

Other hard-hit states included California (one of every 182 households), Florida (one of 186) and Arizona (one of 195). For sheer volume, California led the other states with a total of 72,285 filings.

An especially high percentage of the California filings were bank repossessions. There were 23,406 in all, up from just 4,444 in July 2007. The state accounted for more than a third of all such events in the nation. The number was also a big jump from June’s total of 20,624 bank repossessions in the state.

“The properties there, once they enter foreclosure, are making a beeline back to the banks,” said RealtyTrac’s spokesman, Rick Sharga.

Many of the California homes were bought during the height of the frenzy of the mid-2000s at inflated prices. Now that home values have dropped, borrowers who bought at the top owe more than their homes are worth. These properties are almost impossible to refinance and are difficult to sell.

A couple of Midwestern states have also been consistently among the leading foreclosure hot spots and July was no exception. Ohio was fifth in the nation for foreclosures with one for every 375 households. That includes 4,057 bank repossessions, a 33% increase since July 2007. Michigan had 3,933 repossessed homes, or 17% fewer than last July, when it recorded 4,739.
City centers

The worst-hit metro area of the 230 regions that RealtyTrac covers was Cape Coral, Fla. About one of every 64 households in the Gulf Coast city received a filing during the month, more than seven times the national average.

Merced, Calif., with one filing per 73 households, had the second highest foreclosure rate, followed by the nearby Central Valley cities of Stockton and Modesto, which each had about one filing for every 82 households.

The report is bound to disappoint Washington policy makers and lending industry insiders who have stepped up their efforts to slow the massive default problem. June filings, which were down 3% from May, had been a cause for slight optimism.

But, according to Sharga, that decrease was helped along by rule changes in Massachusetts and Maryland that prevented lenders from issuing filings for up to an additional 90 days after borrowers first fall behind in their payments.

That significantly reduced the number of foreclosure filings in both states. In June, for example, Massachusetts recorded a 55% decrease in initial filings.

“Now, both states are creeping back up,” he said. “The 90-day lull in Massachusetts is being followed by a whole run of properties in delinquency.”

Credits: CNNMoney.com

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Buddy Yates sits at a dining room table awash in paperwork. The bills, late notices and letters represent his nearly yearlong quest to keep his family in the three-bedroom North Las Vegas tract home he bought two years ago.

In December, when he could no longer afford the $2,365-a-month payments, much less the higher payments set to kick in within months, he dialed up his Texas-based lender, EMC.

Yates, a 60-year-old pastor who officiates at valley wedding chapels, wanted the company to restructure his loan by lowering his payments and spreading them over a longer term.

By Yates’ account, he ran into a thicket of red tape.

After seemingly endless waits on hold, he told his story over and over because the same staffer wasn’t available. Company representatives would then give contradictory advice, he said.

“When you talk to some of those people it’s like talking to this table,” Yates said.

Despite lenders’ promises to step up efforts to work with homeowners facing foreclosure, about half won’t reach a deal with their bank, according to recent figures.

As of the second quarter of this year, 12,000 Nevada homes went into foreclosure. Lenders were in negotiations with just more than half that number, according to Hope Now, a nationwide mortgage industry group that offers foreclosure counseling.

But the number of borrowers in need of assistance is expected to grow.

Nevada is expected to remain at the epicenter of the nation’s foreclosure crisis — the Pew Center on the States projects one in 11 homes in the state will enter foreclosure by 2010 — and Yates’ Sunrise Acres housing development seems to lie on a fault line.

Within one block of his home, more than a half-dozen residences are bank-owned or in some stage of the foreclosure process, according to Realty Trac, a Web site that maintains a nationwide database of foreclosed homes.

Like his neighbors, Yates was hit by a slumping economy and falling real estate values.

Last year, his income started to shrink as more couples skipped the trip to Las Vegas for their wedding and tied the knot at home. As it was getting harder for Yates to pay his $300,000 mortgage, the value of his home was dropping, and as a result he couldn’t refinance his loan.

Three weeks ago, Yates met his new neighbors, who had just purchased the house next door out of foreclosure for $167,000.

He figures his house isn’t worth much more. But it’s still home for him, his wife and their 4-year-old son.

Lenders have been deluged by borrowers seeking help.

“They just don’t have enough beating hearts to answer the phones,” said Kathleen Day at the Washington, D.C.-based Center for Responsible Lending.

Wells Fargo spokeswoman Natalie Brown said her company’s staff has grown fivefold to deal with delinquent loans than the bank had five years ago.

Debbie Krznarich of EMC, which holds Yates’ mortgage, would not discuss staffing levels at the company.

Even borrowers who reach their lender face obstacles.

Most loans have been sold to investors, who must approve deals with individual homeowners, Day said. Trustees who manage these loans are sometimes reluctant to modify them for fear of being sued by the investors.

What’s more, for borrowers who have second mortgages, both the first and second lien holders must agree to a deal before it can be offered to a homeowner.

Counselors who help troubled borrowers negotiate with their lenders are also swamped. Michelle Johnson, chief executive of Consumer Credit Counseling, reports that traffic at her agency is up 60 percent to 70 percent from last year.

Recent federal government initiatives to clean up the foreclosure mess have not helped Nevadans, Johnson said. An FHA program offers refinancing to homeowners with 3 percent equity in their homes, but few distressed homeowners in the state have any equity.

“The last I heard, there had not been a single (FHA refinance) loan made to anyone in Nevada,” she said.

The impact from the foreclosures extends beyond those who lose their homes.

The Pew Center predicts that in Nevada 77 percent of all homeowners, not just those in foreclosure, will feel the effects in the form of falling property values. That will have an impact on state and local tax revenue.

“It’s a concern for health, safety and economic viability,” said Lon DeWeese, chief financial officer of the Nevada Housing Division.

In June, Yates met face to face with an EMC representative.

EMC’s Krznarich said that Yates was offered a fair deal that would allow him to keep his home.

But Yates, who has missed more than one payment, said the repayment plan would put him only further behind. By the time he paid the arrears, he said, the interest rate on his adjustable-rate mortgage would go up, putting him back in the same predicament.

Yates has asked the Neighborhood Assistance Corporation of America, a nonprofit housing counseling group, for assistance. If he doesn’t get a reprieve, he said, he’s expecting a letter this month saying the company will foreclose on his home.

“When they sold you the home, they knew (with the adjustable interest rate), you weren’t going to be able to make the payment,” Yates said. “They don’t have compassion for the family who’s in the home.”

Credits: Las Vegas Sun

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Home sales picked up their pace last month as prices continued their slide.

The number of homes sold by a Realtor in the Las Vegas area last month increased for a seventh consecutive month. The Greater Las Vegas Association of Realtors said today that 2,592 single-family homes were sold in July, compared to 2,226 in June. The July number is up 97 percent from July 2007.

Despite the sales increase, the median price of homes sold last month was down to $220,000. That’s a decrease of more than 2 percent compared to last month and a fall of more than 25 percent in the past year.

“As in past months, these latest GLVAR statistics are a mixed bag,” Realtor association President Patty Kelley said in a statement today.

Kelley said bank-owned houses are dragging prices down.

Nevada had the highest foreclosure rate in the nation in the second quarter of the year, according to data from Calif.-based RealtyTrac Inc. In Las Vegas, one in every 35 households received a foreclosure notice last quarter — the third-highest rate of any city in the country.

The Realtor association said 358 condos were sold last month, which is up from 294 in June and up 18 percent compared to July 2007. The median price of those condos, at $135,000, fell nearly 2 percent in the last month, and has fallen about 31 percent in the past year, according to numbers released today.

The number of homes and condos for sale remained steady, with 23,423 homes and 5,538 condos on the market.

Credits: Las Vegas Sun

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