High unemployment in construction, gaming and retail sales is contributing to the epidemic of foreclosures in Nevada, which has slowed as bankers hold back on foreclosing properties in an attempt to raise housing prices.
An assortment of new casino projects under construction has been stopped in their tracks, victims of the global financial meltdown. Unemployment in the construction industry alone is 65% in Las Vegas.
Discounted foreclosures are attracting buyers, accounting for more than half of all sales in Las Vegas. Even as sales pick-up housing prices are declining, but at a slower rate of deflation. However, a second round of foreclosures is projected to hit Las Vegas in early 2010, which will deflate home values more rapidly.
Bankers are working with homeowners more effectively in short sales, enticed by federal stimulus money to work with owners to sell homes at a reduced price instead of foreclosing. The process, however, can take months to work out with mortgage servicing companies and historically only a small percentage of deals close.
Investors make up the largest percentage of home buyers in Las Vegas, which had the highest number of subprime and adjustable rate mortgages go into default in the country. The fall-out from the housing crash is far from over in Las Vegas, which is projected to see another 60,000 foreclosures in 2010. Bankers will slash prices on homes to get them off their books, pressuring the market down further. Housing Predictor forecasts Las Vegas average housing prices to deflate 13.2% in 2010.
New home building has come to a virtual halt in Henderson as developers walk away from projects, leaving subdivisions like Zombies. The housing crash has damaged the local economy, and sent construction workers to the unemployment lines. A turn around isn’t expected any time soon in Henderson, which is forecast to sustain average housing deflation of another 11.6% in 2010.
Sparked by lower home prices and the first time buyers’ tax incentive, home sales are rising in Reno, otherwise known as “The Biggest Little City in the World.” Gaming tables are seeing fewer gamblers these days as Reno deals with the worst economic downturn since the Great Depression. Although home sales have risen in Reno, prices are still declining, and are forecast to drop another 13.1% in 2010.
In Lake Tahoe the second home market dominates, but has seen a growing influx of year round residents move to the area. The luxury housing market above $1-million has begun to show some stability, but the rest of the market is still showing weakness even as home sales rise. Housing values are projected to decline over the coming year in the Tahoe basin, best known for having a series of snow skiing resorts attracting winter tourists to the area.
Lake Tahoe home prices started deflating later than many other areas of the state, but isn’t seeing an especially high number of foreclosures. Average housing prices are forecast to decline 11.8% for the year.