I'm almost afraid to say it.
The Las Vegas housing market shot higher than anywhere else, and fell harder. According to the Case- Shiller Home Price Index, Las Vegas has seen the largest price collapse from the peak, down more than 54 percent. RealtyTrac says Sin City is once again leading the nation in foreclosures.
How much worse can things get?
Some real estate analysts say it could get worse, that there are an estimated 25,000 homes which banks have repossessed but not yet put on the market. Sales are up, but when will prices stop falling? "They may have already," says Century 21's Rosa Herwick, who's been selling homes in nearby Henderson for over 30 years.
Herwick says houses priced at $200,000 or less are getting multiple bids. "The market right now is very active." The California/Nevada Credit Union League tells CNBC that Nevada credit unions issued 1.4 percent more fixed rate mortgages in the second quarter compared to the first, and have so far generated $356 million in primary mortgages this year.
I met Herwick inside a home built in the early '90s which sold a few years ago for around $350,000. It's listed for $160,000 and she's currently got it approved for a short sale, where the bank is willing to accept less than the mortgage is worth. This is a big change. While some short sales still take an excruciatingly long six months, Herwick says some are now going through in "only" two months.
On CNBC.com now:
- Slideshow: 10 Most Affordable Metro Areas
- Slideshow: 10 Highest Homeowner Vacancy Rates
- Slideshow: 10 Most Popular Relocation Cities
Herwick also says investors have come back into the Vegas market, but not house flippers. "Our market is not going to go up for a while," she says. "They're looking to get a cash flow."
One other interesting change, according to Herwick: Fannie and Freddie are allowing tenants to continue renting in homes the mortgage giants repossess. "If a tenant is in a property when it's foreclosed on...they're allowing them to stay in the property for the term of the lease." What no one knows is how long Fannie and Freddie will stay in the property management business before adding the homes to the general flood of inventory.
As bad as it is, Herwick thinks it was worse in the early '80s, when so many FHA mortgages went bad in the era of high interest rates. "Even then you might see every fourth house on the block in foreclosure." You see that now, except that some of the homes are selling. I heard of one man who bought his home at the peak for $375,000. The vacant house across the street from him is now on the market--the bank will take $99,000, if you pay cash.
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