(MCT—Regional Spotlight)–For several years, banks held an iron grip on Las Vegas’ weak housing market, as most sellers either were bankers unloading foreclosed properties or underwater locals who needed their blessing.
Today, however, an improved market is crimping their influence.
About 70 percent of used-home sales in Southern Nevada now are traditional deals between private buyers and sellers, according to the Greater Las Vegas Association of REALTORS®. That’s up from 51 percent a year ago and 26 percent two years ago.
That doesn’t mean the valley’s housing market is fully recovered from the recession, nor does it mean that most deals take place between locals. Investors still are buying and selling many properties here.
And bankers haven’t been pushed aside completely. They still issue mortgages to buyers and control distressed properties.
But the shift to traditional deals from short sales and foreclosures, two hallmarks of the housing bust, reflects the valley’s ongoing economic recovery.
“We’re approaching a more balanced market,” says broker Janet Carpenter.
Bank-owned homes comprised almost half of all sales two years ago but now make up less than 10 percent, according to GLVAR data. Short sales—when banks agree to sell a home for less than what’s owed on the mortgage—comprised almost half of all deals a little more than a year ago but now make up 21 percent.
Brokers attribute the plunge in foreclosure sales to Nevada’s “robosigning” law, which took effect in fall 2011. Assembly Bill 284 forced banks to provide more paperwork before seizing homes from delinquent borrowers, drastically slowing the foreclosure process and slashing the number of bank-owned homes for sale.
Meanwhile, investors swooped in after the housing bust to buy cheap homes in bulk to turn into rentals. The demand spurred property values to rise at one of the fastest rates nationally and helped many owners escape from being underwater, eliminating their need to short sell.
Las Vegas’ median home value in November was $167,500, up 31 percent from a year earlier, according to Zillow. Meanwhile, during last year’s third quarter, 40 percent of local homeowners with mortgages were upside down, meaning their debt outweighed their home value. That still was the highest rate in the country but far below the local peak of 71 percent two years ago.
Others on the cusp of escaping negative equity are waiting for values to rise even more so they can sell their homes in a traditional sale without having bankers dictate a lengthy, bureaucratic short sale.
“People are not as panicked to get out of their homes,” RCG Economics principal John Restrepo says.
Despite the improvements, Las Vegas’ real estate market likely won’t heal completely anytime soon.
“There will still be short sales out there, but not nearly as many as there used to be,” says Kolleen Kelley, president of the Nevada Association of REALTORS®.
©2014 the Las Vegas Sun (Las Vegas, Nev.)
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