The presence of bank and government tax foreclosure properties impact the values of non-foreclosed homes within their vicinities, according to a study conducted by the Lied Institute for Real Estate Studies at the University of Nevada in Las Vegas. According to the authors of the study, owners of non-foreclosed homes lose value on their properties if they are surrounded by foreclosed and distressed structures.
Las Vegas and Reno foreclosure listings have some of the highest levels of foreclosures in the state of Nevada. According to the institute study, non-foreclosure homeowners in Las Vegas have lost value on their properties by around $78,000 during the period July 2008-July 2009.
Homeowners living in areas where one can find foreclosure homes in Nevada by the thousands have called on lenders to conduct more short sales to prevent neighborhood deterioration and further decline in housing values. However, the Association of Realtors in Las Vegas has revealed that short sales have declined to 28% from a high of 34% recorded in June of this year.
According to housing analysts, the continuous rise in the number of bank and government tax foreclosure properties is pulling the prices of residences further down in Las Vegas. Their main concern is that most of these homeowners will likely abandon their properties and add further to the high number of vacant houses in the city.
The number of empty and foreclosure homes for sale is likely to increase in the coming months since an estimated 80% of homeowners in the metro area are said to be holding mortgages worth more than their homes. Analysts stated that majority of these underwater borrowers believe that they do not have much to gain in investing in their properties or in continuing to pay their mortgage obligations.
The study from UNLV has revealed that a neighborhood will feel the impact of foreclosures on their property values once the number of foreclosed properties reached 40. Once this number is reached, the authors stated that non-foreclosure properties in the area will lose around 20% of their property values. They also estimated that if all non-foreclosure value declines are attributed to bank and government tax foreclosure properties, then the overall value drop between July 2008 and July 2009 is around 33%.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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