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Las Vegas Foreclosures Soared As Tourism and Gaming Declined

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By : John Cutts    99 or more times read
Las Vegas foreclosures topped all other U.S. metro areas in 2009 based on foreclosure rate largely because the city is dependent on tourism and gaming industries that declined during the recession as U.S. consumers spent their money on necessities.

In 2009, 12 percent of residential units in Las Vegas or 94,862 units received at least one notice of default or foreclosure, over five times the nationwide foreclosure rate of 2.1 percent. The 12-percent rate also marked an increase of 41 percent from 2008 and a jump of 213 percent from 2007. Serious mortgage delinquencies also increased over the October-November period to 20.1 percent of all mortgage borrowers.

However, the pace of foreclosures dropped in Las Vegas in the fourth quarter, compared to the third quarter, as lenders complied with the state-mandated mediation scheme for delinquent homeowners.

In 2008, Las Vegas posted an 8.9-percent foreclosure rate and ranked fourth among all metro areas, marking a jump from its fifth-place ranking in 2007.

The yearly increase in rate of Las Vegas foreclosures showed how the drop in tourism- and gaming-related activities affected employment and housing. The jobless rate in the metro area in November 2009 was 12.1 percent, a still high rate despite its drop from 13 percent in October. Statewide, the rate was 12.3 percent in November.

The pace of Nevada foreclosures also climbed up sharply in 2009, rising to 10.2 percent of all mortgaged homes in the state, a jump of 44 percent from 2008 and an increase of 226 percent from 2007. More than 112,000 homeowners across the state received notices of delinquency or foreclosure in 2009.

Despite topping the foreclosure rate chart for all U.S. states in 2009, Nevada got only around $21 million from the Housing and Urban Development Department to mitigate the effects of its record numbers of foreclosed houses for sale. The whole amount was allocated to the housing authority of Reno, whose funding application was the only one approved among all applicants in Nevada.

Even Las Vegas, which topped all other metro areas in foreclosure activity, received nothing. Some HUD officials explained that Las Vegas was not able to spend all the funds it received from the first funding round of the NSP.

According to Las Vegas Mayor Oscar Goodman, Senate Majority Leader Harry Reid of Nevada and other Nevada officials, it was illogical for the HUD to overlook the large numbers of Las Vegas foreclosures in 2009.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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