Home shortage in Las Vegas? In foreclosure deals yes, Realtors say
House hunters can’t be as picky in Las Vegas today as they were a year ago, especially if they’re looking for a bargain on a foreclosure home. There’s actually a shortage of those homes, roughly one month’s supply at current sales levels, local Realtors say.
Anything in the range of $80,000 to $125,000 is snapped up with multiple offers, said Tim Kelly of Re/Max Extreme in Las Vegas.
Listings for real estate-owned homes, or bank-owned homes, decreased to 1,437 in March, down 40 percent from 2,643 a year ago, data gathered from the Multiple Listing Service show.
Kelly expects them to drop for a few more months as a result of the robo-signing law that took effect in October. The law requires banks to provide affidavits of authority to foreclose, along with documents related to ownership of the mortgage note. It has throttled the inventory of bank-owned homes in Las Vegas.
Lenders filed just 195 notices of default — the first step in the foreclosure process — in January, compared with 3,364 notices in the same month a year ago, according to First American Title Insurance Co. Default filings have been around 200 a month since October.
"I don’t see an immediate resolution," said Kim Petersen, marketing executive for First American. "There’s so many opinions. Unless they call a special Legislature and try to get this law amended … because the Legislature doesn’t meet again until 2013."
About 14,000 homes are pending or contingent sales, a majority of them short sales "stuck in the mud," Kelly said. They’re awaiting bank approval for a sale at less than the mortgage balance.
"I think banks are holding onto the inventory so as not to flood the market, but with the (robo-signing law), NODs and actual foreclosures have almost stopped," he said.
Kelley said the law has encouraged homeowners in default to remain in their homes without making mortgage payments.
"Some homeowners realize they can stay longer because banks are not going to move quickly. A lot of people say, ‘I’ve missed three payments. What if I miss another three or 10? Who cares?’ A lot of people have told me instead of doing a short sale, they’ll stay and not pay," he said.
Joe Brezny, deputy director of government affairs for the Greater Las Vegas Association of Realtors, said trustees must have "personal knowledge" that the property is actually owned by the foreclosing party.
Some ideas include a better legal definition of "personal knowledge," and to specify that multiple parties in the foreclosure can attest to pieces of information if no one person can attest to all of it, Brezny said in the March edition of Southern Nevada Realtors.
Keith Lynam of Windermere Prestige Properties said the REO numbers are down, but there was a definite problem with the foreclosure process.
"Not all of those (foreclosures) were justified," he said. "A lot of times, the banks did tell them they’ve got to stop paying their mortgage (to qualify for loan modification programs). The bottom line is there were some forgeries and illegal signing. It’s important to note that the problem is the affidavit and personal knowledge, but at the end of the day, we didn’t create the robo-signing, we didn’t create credit swap derivatives. Again, it’s not our issue, it’s the bank’s."
Joe Iuluicci of Keller Williams Realty said real estate agents are becoming more guarded with their listings as inventory has dissipated. Lenders on Federal Housing Administration mortgages aren’t interested in doing a short sale because they’re insured by Housing and Urban Development, he said.
"Look at HUD homes. They’re typically nicer houses now in Southern Highlands and Rhodes Ranch," Iuluicci said. "There are definitely more buyers with less inventory. Will that correct the market? I don’t think so, but it’s definitely changing things."
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.
