Foreclosure Homes for Sale in Las Vegas Absorbed by Market- By: John Cutts
Foreclosure homes for sale in Las Vegas this year will be absorbed by the market because of continued demand from real estate investors, according to Dennis Smith, head of Home Builders Research.
Smith contended that the pace of Las Vegas foreclosures this year will not step up as fast as last year and that investors will push first time homebuyers away from the foreclosure market to the newly-constructed home market.
He said that sales of pre-owned homes will rise slightly to about 45,000 units this year, compared to the 44,885 units sold last year, and then will slow down to about 44,000 next year because of the increase in mortgage rates.
Smith also predicted that the prices of existing homes will climb up by over three percent this year to $127,000 and by a further 5.6 percent next year to $134,000. He explained though that any price increase will not be substantial in the next few years.
He expects the price median for new homes to jump by 2.8 percent to $220,000 this year, compared to $216,000 last year, and the number of home building permits to climb up to 4,400 from 3,850 permits in 2009.
Other analysts, however, and local realtors contend that foreclosure homes for sale will continue to grow substantially in Las Vegas this year. In December last year, the pace of foreclosures in the area jumped to 8.53 percent, a substantial increase from 4.2 percent the previous year and far above the nationwide rate of 3.16 percent, based on data from a foreclosure research firm based in Santa Ana, California.
The mortgage default rate also shot up last December, rising to 21.1 percent from the December 2009 rate of 11.9 percent. These troubled loans were seriously delinquent as they were in default by three months or more.
Local realtors also reiterated that the rise in interest rates, the stricter home buying guidelines of the Federal Housing Authority, job losses in the government sector and the resetting of adjustable mortgage loans will push further increases in repossessed homes in Las Vegas.
The plan by Bank of America to release to the market about 500 of its bank owned homes in Nevada this year is another pressure on the foreclosure market.
In 2009, Las Vegas posted the highest rate of foreclosure, with nearly 95,000 of its houses notified of delinquency and with a big percentage already counted as foreclosure homes for sale.
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John Cutts has been educated in the finer points of the foreclosure market over 5 years.