Vegas Foreclosures Up Again
Notice of defaults filings against delinquent borrowers were the highest in the month of September 2013 since September 2011. Lenders filed roughly 3700 foreclosure notices in September 2013, more than triple the month before, with more than 440 local notices of default filed on Friday Sept.30 2013 alone according to LVDEFAULT.com and analysis firm Home Builders Research. Whats ironic about this? Well a new law went into effect October 1st, making it harder for banks to foreclose against homeowners. So what does this mean? Most lenders probably wanted to try and get these foreclosures filed before the new law went into effect.
Will this bring more home inventory and further sag home prices? Well as of now we show 7571 single family homes and condos on the market in the Greater Las Vegas area, and 2877 single family homes and condos were sold last month, making our current absorption rate at 2.6 months, which still signals a strong sellers market. These new foreclosures are nothing compared to the rate of foreclosures that hit the market between 2007 and 2011, and foreclosures have been down significantly since October 2011, as many of the underwater home owners and investors walked away, short sold, or did a loan modification, and laws were enacted to make it hard for banks to foreclose. On top of that, prices are up over 30% from the bottom, so there are less homeowners under water and banks are working with people a lot more who have bad loans or who couldnt refinance before.
So, to sums things up a normal market is considered 6 months of inventory, which we would need a lot of inventory still to get there, so I don't think our market will suffer significantly the way it did from 2007-2011, and the market can bear any new inventory this spike of foreclosures will bring. On a positive note we actually need a little more inventory to shift back to a normal market, give our buyers more options in the market place and enable FHA and VA buyers to get a home and not be outbid by cash buyers.