Las Vegas Homeowners: 1/2 are upside down
A new report from Zillow says that half the people who have bought homes in the Valley within the last five years are now upside down.
Many more Zillow created Charts and Graphs found here
Las Vegas Sun: Vegas home prices at 2003 levels
Owners of more than half of all homes sold in the Las Vegas area in the past five years have negative equity in their homes, according to a new report.
The report from Zillow.com, which tracks real estate values across the country, indicates that home prices in the Las Vegas area have fallen to levels not seen since 2003, and homes sold for a loss in the second quarter of this year made up 69 percent of all home sales.
According to Zillow, the average home in the region -- including single-family homes and condos -- is valued at $205,500, which is down more than 27 percent from a year ago, and down more than 34 percent from the market's peak of $313,275 in the first quarter of 2006.
The report indicates that 99.4 percent of homes lost value in the past year.
Among the report's other findings:
- More than 48 percent of homes sold in the Las Vegas area in the second quarter of 2008 were foreclosures.
- About 70 percent of homeowners who purchased their homes in 2005, 2006 or 2007 have negative equity in their home. For example, about 73 percent of homes purchased in 2006 have negative equity, with homeowners having median equity of minus $52,444.
This negative equity situation was caused by excessive speculation and Subprime use - and was exacerbated by the current credit crisis.
The problem however is likely to get much worse: with a massive (>28,000 home) inventory overhang, Alt-A (Exploding ARMs/Liars loans, etc) starting to reset, significantly falling gaming revenue (Las Vegas: Gaming Revenue down > 16%) and an economy reeling from recession (Las Vegas Economic Recession is here) home prices have nowhere to go but down -- much further down.
From a report I read today: Liar Loans Stir More Defaults
~ 40 percent of loans made in California and Nevada in 2005 and 2006 were either interest-only or option ARMs -- "It was pretty evident that the only thing that was supporting these loans was higher home prices"
So, will the headline this time next year be: Vegas home prices have fallen to 2000 levels and 60% of those who purchased in the last 8 years are upside down?
Guess only time will tell...