Southern Nevada to Have More Repossessed Houses
Southern Nevada will struggle with a slow economy and a housing market filled with repossessed houses for two more years, according to economists connected with the Center for Business and Economic Research of the University of Nevada.
The economists, led by Keith Schwer, said that economic recovery is more difficult to work out in Southern Nevada because of its complete dependence on tourism, which is consumer-based.
As consumers and tourists stayed away because of the recession, tourism-based enterprises collapsed, cutting jobs and causing large numbers of repossessed houses.
Schwer further explained that the economy of Southern Nevada depends on discretionary spending, which is the type of spending immediately cut off by people in times of financial difficulties. He also warned residents of Southern Nevada to prepare for further economic difficulties and further increases in numbers of repossessed houses.
The Nevada economists contended that the economic recovery of the state would depend on both the recovery of the global economy and the nation’s economy.
The economists also predicted that construction in the state will remain slow, causing more unemployed workers and more repossessed houses. They said the housing market slump could continue up to 2011 unless the population of Nevada grows by a significant percentage.
Hospitality and leisure enterprises will offer low-cost room and entertainment packages to attract more visitors, but the resulting increase in revenues would not be adequate to prop up overall corporate and government incomes.
Additional jobs will be created as new hospitality enterprises are opened, but workers would still limit their spending especially for discretionary expense items such as travel and leisure.
In May, the unemployment rate in Nevada reached a staggering 11.3 percent, the highest level in Nevada’s history.
In the same month, in a nationwide survey of foreclosures across the country, Nevada topped a ranking of states according to foreclosure rates. One housing unit out of every 64 housing units in the state got a foreclosure action, more than six-fold the national foreclosure rate of one unit for every 398 housing units.
A total of 17,157 housing units in the state received foreclosure filings, third in a ranking of states according to number of foreclosures, after California and Florida. A staggering 23-percent rise in bank-owned repossessed houses contributed to the increased pace of Nevada’s foreclosure activity in May.
Of the more than 17,000 residential properties with foreclosure filings in May, more than 3,000 units were already listed by lenders as bank-owned repossessed houses.
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