Losing Streak of Las Vegas Home Prices
Las Vegas home prices fell again in April, now at its 7th month losing streak. The fall is caused by high
levels of foreclosures in the market as well as high unemployment that continues to slow down the market.
The Standard & Poor’s monthly report
showed that prices fell down to 0.7% from March, which compares to a gain of
0.7% for the big 20 United States market. S&P also reported that Las Vegas
area prices were down to 6.2% compared from April 2010.
This overwhelming result showed the year-over-year
decline of 4% among the 20 big cities.
The S&P also said that 6 metropolitan
statistical areas have fallen into new lows since the prices peaked in the mid
2000s. Las Vegas prices peaked last August 2006. The 6 metropolitan statistical
areas are as follows: Las Vegas, Chicago, Detroit, Miami, Charlotte and Tampa.
The Greater Las Vegas Association of
Realtors compares the numbers that they issued in June 8 and in May. They have
found out that the median price of a single family Las Vegas home was $126,000 that
is up 0.8% compared from the $125,000 in April. But this shows that it is down
11.3% compared to a year ago.
Meanwhile, Bloomberg News reported that an
initiative to keep people in their homes providing bank enticements to write down
principal mortgages resulted in just a minimal success.
According to Bloomberg News, Nevada area
has completed 114 principal reductions under a program started last year. The program
offered up to $50,000 in matching funds every loan, this is to make principal
write-downs work for the loan servicers and as well as investors.
In Nevada and Las Vegas, the problem of
underwater Las Vegas homes owners and vacant Las Vegas homes is severe. As
RealtyTrac reported, Las Vegas continues to lead the whole nation in foreclosures
in which in every 103 homes in Nevada, one home is receiving a foreclosure
filing in May. The Las Vegas market also continues to be devastated by
unemployment.
David Blitzer,
chairman of the Index Committee at S&P said that, “Other housing
statistics show the same trends. Single-family housing starts were up in May,
but still well below their 2010 levels and still very close to their 30-year
low. Existing home sales rose in May, but are still about 15 percent below last
year’s pace and about 35 percent below their 2005 pace. While foreclosures
remain a large factor in most parts of the country, the S&P/Experian
Consumer Credit Default indices show a small decline in the pace of new
defaults since last November. Other reports confirm that banks have tightened
lending standards in the past year, making it harder to qualify for a mortgage
despite very low interest rates.”
Blitzer also
said, in a statement that the seasonally adjusted numbers show that many of the
improvement reflects the start and the beginning of the homes buying season. “It
is much too early to tell if this is a turning point or simply due to some
warmer weather,” Blitzer added.