Significant Changes are occurring in the Las Vegas Real Estate Market.  Short Sale Listings in the Greater Las Vegas Association of Realtors Multiple Listing System passed the 50% mark for the first time.  This occurred in November, 2010.

 

In November there were 951 Bank Foreclosures, less than half of the 2,195 we saw in October, in fact, less than the half of the 1,900 average for the first ten months of this year.  The reason is the "robo-signing" scandal which broke in September and October.

 

It is anticipated that bank foreclosures will not snap back to the previous normal level of 1,900 because banks are finally realizing that they are better off pursuing short sales than they are pursuing foreclosures.

 

The International Credit Rating group, Fitch Ratings, indicates; "Loss severalty's are expected to increase between 5% and 10% on residential mortgage-backed securities in 2010 as loss mitigation costs and foreclosure expenses go up."  This is a national trend, and is part of the solution to our current housing crisis. 

 

November, 2010 sales in the Las Vegas Market:

 

Short Sales                              824                           $125,000 Average Sales Price Auction Sales                          308                           $ 91,000 Average Sales Price   REO Sales                            1,597                           $111,000 Average Sales Price   Non-Distressed                   1,187                           $119,900 Average Sales Price

 

 

Note from the chart above that Short Sales have the highest average sales price when compared to all other sales.

 

It is likely we have at least another two years of distressed property sales coming in the Las Vegas market.  Currently 16% of homeowners are more than 60 days delinquent on their mortgage payment and 75% are underwater.  Prices are likely to remain suppressed for the foreseeable future.

 

With so many homes underwater and so many homeowners delinquent, why aren't banks foreclosing more quickly.  Banks seem reluctant to foreclose on homes expeditiously, and many people are still living in their homes months even a year or more after they stopped making their payments.  Banks sense the very precarious nature of the housing crisis.  They realize that aggressively proceeding with foreclosing as their first remedy would be self defeating, driving prices down both lower and faster.  That is the reasoning underlying the short sale.  Leave the homeowner in the home, let him maintain the home, and help him out of his underwater condition.

 

With that in mind, why wouldn't the bank "short sale" the home to the homeowner who is living in the property?  If anyone has the answer to this let me know!

 

 Thank you to James Fifield, Old Republic Title Company of Nevada for his fast facts!