Glut of Bank Foreclosure Properties Expected in Nevada
An analysis of January to June records at the Clark County Assessor in Nevada showed that banks are selling more single family houses at a pace faster than purchasing them through foreclosure.
According to the study, banking institutions purchased about 6,472 foreclosure properties and sold almost double, totaling 11,254 for the first six months of this year. Most bank-owned properties are acquired by lenders through trustee sales. Data showed that the number of real estate owned in Las Vegas dropped by 13,200 at the end of the first half of 2009 from 16,000 at the start of the year.
Industry experts pointed out that the decline in foreclosure listings may be due to voluntary foreclosure moratoriums by banks and increased investor activity. But they expect things to change as foreclosure moratoriums ended in March and acquisition activities by banks rose by 40 percent last June and 55 percent last May.
Experts said that if the current trend continues, the housing market could expect a glut of bank-owned properties in the third quarter of this year, together with a dramatic drop in home prices. They noted that foreclosures by government-sponsored enterprises, Freddie Mac and Fannie Mae are expected to rise by as much as 500 percent before the end of this year.
Some experts pointed out that banking institutions are holding off their foreclosure home inventory because they do not want to pay more property taxes.
The first wave of foreclosures that hit Nevada and the rest of the country was caused by the collapse of the subprime loan market and high volume of homeowners who defaulted on their adjustable-rate mortgages.
Industry analysts expect that prime borrowers will bring the next wave of foreclosures. They explained that many prime loan borrowers are expected to go into default due to unemployment and drastic decline in home values which left many of them owning properties less than the total amount they owe for their mortgages.
Meanwhile, industry data showed that last June, Las Vegas saw about 12,545 houses for sale, including short sales and bank foreclosures. The figures were said to be smaller compared with 20,613 houses reported by a real estate association.
About 13,028 homes are listed for sale on the Las Vegas market, a 41.5 percent drop or 9,224 compared with the previous year.
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