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The Las Vegas foreclosure and short sale market - Part 1

A recent local television news story mentioned that Nevada was one of the top four states in the nation for foreclosure activity, along with Arizona, California and Florida. That's a distinction that no state wants to have, and coupled with our big increase in short sale activity, it made me wonder just how serious the situation was.

To begin my research I went to RealtyTrac, a leading online source about foreclosure properties, and the third largest real estate site overall according to MediaMetrix. They also publish a blog about foreclosures called ForeclosurePulse. Here's what they had to say in an August 14,2007 article:

"Las Vegas documented the third highest foreclosure rate among the nation's 100 largest metropolitan areas, with one foreclosure filing for every 31 households during the first half of 2007. The metro area, which comprises Clark County, reported 22,928 foreclosure filings on 13,028 properties, a 72 percent increase from the previous six-month period and more than twice the number reported in the first six months of 2006."

Las Vegas agents have all felt this trend happening this year and now it was quantified. My next research stop was our local MLS. As of September 15, there were 27,231 homes listed in the Las Vegas valley. Of those, 1542 indicated that the foreclosure process had commenced (5.7%), and 3105 were short sales (11.4%). Here are the details:

Single FamilyCondominiumTownhouseTotals
Active Listings21,5134,0831,63527,231
Foreclosures1,37898661,542
6.41%2.40%4.04%5.66%
Short Sales2,7872091093,105
12.95%5.12%6.67%11.40%
(GLVAR deems information reliable but not guaranteed. Data is for MLS areas 101-606.)

With this high-level overview as a starting point, we can now delve further into specific aspects of the foreclosure and short sale market in Las Vegas. Subsequent posts will address these issues:

  • Which price points have the highest incidence of foreclosures and short sales?
  • How do foreclosures and short sales affect overall market value?
  • What issues do buyers and sellers need to be aware of when they're involved in a foreclosures or short sales?

Today's Las Vegas real estate market is a challenging one, but there are still plenty of opportunities to buy and sell homes. Working with an experienced agent and getting educated about the subtleties of this market will be the keys to success. To be sure that you don't miss a part to this series, subscribe to this blog.

Read more:
Part 2 - Las Vegas Foreclosures by Price Range
Part 3 - Las Vegas Short Sales by Price Range

Posted Saturday Sep 15
( 09/15/07 10:13PM ) — Jason Romrell

Always like to see Vegas info. Thanks for sharing.

( 09/15/07 10:46PM ) — Robert Monk Florida Real Estate

Not a good sign....  thanks for the research.

( 09/15/07 10:49PM ) — Mary Pope-Handy, ABR, CRS, ePRO, SRES

Hi John,

Thanks. I had a subscription to Realty Trac for awhile but personally did not want to attract that business (or short sales). I can't say about your market, but here the foreclosure sales are difficult at best and there's a long "right of redemption" that makes it iffy for buyers.

I would guess that the foreclosures in your area (and others) are mostly low-income areas. At least that is true here.

But it also sounds like it's impacting the move-up market, as the move-up buyers can't sell if there's a flood of inventory in homes like the ones they're wanting to sell. Is that what you are seeing?

Best regards from Silicon Valley,
Mary

( 09/15/07 11:21PM ) — John Novak - Las Vegas and Henderson NV Real Estate

Jason - I've got a lot more where this came from. Thanks for commenting!

Robert - It is a little discouraging seeing this many sellers in trouble. Hopefully I will uncover some positive info as I continue to look into this.

Mary - Your questions are about the same as mine, which is why I'm really digging into the data to see what I can find. Short sale listings can really be a challenge. While the initial price may attract lots of potential buyers, the slow response times from banks often results in those buyers moving on to another property.

( 09/16/07 12:00AM ) — Rick & Ines - Miami Shores Real Estate

I hate to be top 4 John, but we have to address the issues.  I'm curious to see what you come up with.

( 09/19/07 01:15PM ) — Chico CA Real Estate by Sandi Bauman, Chico CA Realtor

John-  This kind of puts it all into perspective  "one foreclosure filing for every 31 households."  Wow!

( 09/20/07 10:54AM ) — Mike Lewis San Diego Realtor

John,

This is a trend that is just starting. Buckle your seatbelt we're in for a long bumpy ride. Good post you've done your homework.

Mike Lewis

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