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Las Vegas Foreclosure Bubble
November of 2004.
Every time I talk with someone the question gets
asked, "What is going to happen with these home prices? It is getting ridiculous." My answer has been
I have no idea and if something doesn't change real soon, no one will be able to buy a house unless they are coming
from California with a fist full of money and haven't lost it all in a Casino or Strip Joint. (Having been transplanted
from California myself back in 1988 I speak from experience).
The people who are making all the money right now are the Foreclosure Auction Investors and the "WE BUY HOUSES"
sharks, signs and flyers taped to poles seemed to spring up everywhere over night. This group of "Opportunity
Engineers" are able to talk (con) these distressed homeowners, most of whom may have just had a little financial
glitch, to sign over most if not all of the equity from their home to them. Some of the "Strong Arm"
tactics used on these homeowners is reminiscent of the "Old School" Las Vegas crowd that no longer exists
here anymore. The distressed homeowner has many options at their disposal. One of the most assessable is the use
of a Certified Loss Mitigation Consultant that can assist you in getting the proper lines of communications going
between you and the Bank. The most difficult item to overcome is the big undeniable all encompassing case of DENIAL
the homeowner usually has which causes the most damage and financial loss.
I digressed, so back to the subject at hand, the housing market bubble. Here are the numbers. In April/May the
Single Family Residence (SFR) inventory available for re-sale went below 2,800 homes. Normally we maintained an
inventory of 6,000 SFR's for sale and there appeared to the average person that all the houses were sold and Buyer's
started to offer $5,000, $10,000, $30,000 above the listed price which was already above normal market price. It
got so bad that some offers had no price on it and just said $2,000 above the highest price offered and the Buyer
would pay out of his own pocket the difference between the Appraisal and the agreed to Sales price. I got to tell
you I was amazed here I am getting offers that don't care about the appraisal value when just months before I had
Buyer's Agents sweating my clients to lower the sales price because the Appraisal came in $500.00 below the sales
price. Then on top of it all and to add to the hysteria the New Home Builders were sending out press releases saying
that they would not sell any more homes to Investors or Second Home Buyers since it was unfair to the 400 plus
homebuyers on their waiting lists and it seemed like every model at every new tract had a 400 plus waiting list.
The one thing that nobody knew was that it was the same 400 people that had gone to every tract and placed their
name on the waiting list in hopes to being able to buy one just to turn around and sell it at a ridiculous profit
when it was finished.
The market has completely changed and in September some 4 months-(120 days) later from our low in April of 2,800
SFR's the inventory of available SFR's for sale has exploded to over 12,300 homes for sale. The majority of these
homes are overpriced and reminiscent of days gone by, and a large number are vacant, thanks Arnold. The SFR rental
market has reached historically high numbers for available homes to rent. With the current "condo conversion
craze" we are going through, some 30,000 units being converted currently have caused those previous occupants
to hit the road and look for another place to live. The Apartments that we have left are full and not giving anything
away so these displaced ex-apartment dwellers have been moving into homes, and temporarily propping up the rental
market keeping it from having the bottom fall out.
The average median sales price, median being the same amount of home have sold above it as have sold below it,
has jumped anywhere from 25% to 78% in July over last year. Now this has been a good thing for those Seller's that
are packing up and leaving but is a serious problem for those Buyer's wanting to purchase a home that haven't just
sold a home for a huge profit or have come here with a fist full of money and were able to bypass our State tax
collection facilities (Casino's & Strip Joints). I don't know of any Casino or other employer giving out 25%-78%
increases in wages so they will be able to afford the median sale price reached in July of $329,900 for a single
family home in Clark County.
To sum it all up I can't see maintaining the type of appreciation we have seen so far this year. The market changed
from an under supplied Seller's Market to an over supplied Buyers Market very quickly, it was almost like someone
turned on the Over Supply switch. As far as the super doom & gloom for our market I don't think it will be
all that disastrous since the market could take an overall 25%-40% correction and most of the homeowners would
still realize a good amount of cash in hand.
With the foreseeable decrease in sales prices and the high percentage of refi's the equity spread will narrow and
troubled Seller's won't find it so easy to just refi or sell their way out of trouble increasing the amount of
homes that actually make it to Foreclosure Sale and thusly causing the Foreclosure Auction Investors and "Opportunity
Engineers" to find the next hot spot. This increase in REO inventory will open the doors to the "regular
investor" with the opportunity to purchase a bank foreclosure at a reasonable price.
Thomas Blanchard has been specializing in the disposition of Las Vegas Bank Owned Foreclosures since 1994. He is
the Broker Owner of 1st Realty Group-REO Asset Services, LLC, which was opened specifically to service the Las
Vegas Bank Owned Foreclosure market. He is a Certified Loss Mitigation Consultant and an Associate Member of REOMAC.
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Click here if you would like More info on Defaults & Foreclosures in Las Vegas
REO Asset Services was specifically started to serve
the Las Vegas Foreclosures Real Estate needs of Banks and Financial Institutions in the disposition of their Bank
Owned foreclosed homes. So if your looking for a Las Vegas Foreclosure or Bank Owned Foreclosed Home, REO, VA or
HUD Repos, we are the Company for you. After all we are:
"Your Las Vegas Real Estate Connection!"
We also handle the marketing and purchasing for most
difficult or specialized Real Estate transactions: Properties in Default - Pre-Foreclosure - Bankruptcy - Divorce
- Probate
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