A recent report reprinted in the Las Vegas Review Journal shows that Las Vegas, even after years of record setting foreclosures, still leads the nation in underwater homes. Zillow's Negative Equity Report tracks homeowners' outstanding mortgage balances versus the value of their homes. Zillow's report confirms data released by real estate analysis firm CoreLogic which found that 52.4% of Las Vegas households currently owe more on their mortgages than their homes are worth.
The passage of Assembly Bill 284 may be partially to blame for this backlog of underwater homes. AB284 brought the Las Vegas foreclosure market to a screeching halt last year. Foreclosures dropped from more than 4000 per month to less than 100. Banks have since found ways to re-initiate foreclosures, but still at nowhere near the pace they were before the passage of the controversial bill. This has many analysts wondering what will flush out the supply of underwater properties if foreclosures remain sluggish.
The proclivity of negative equity is not equal throughout the Las Vegas valley. Pockets of exceptionally high rates of underwater homes exist along the 15 corridor from downtown up through North Las Vegas to the Nellis Air Force base as well as the northernmost portions of Centennial Hills. As many as 74% of all homes are underwater in those areas. Rates are significantly better in other parts of the valley, most notably Anthem, Henderson, Green Valley and areas near Summerlin, with rates as low as 29% in Summerlin proper.
With an uncertain real estate market ahead of us in the short term, the best advice for many homeowners is to either refinance or list their home as a short sale. Refinancing is extremely attractive for many homeowners with home prices climbing sharply over the last six months and interest rates dropping to record lows. It is also the perfect time to take advantage of a short sale opportunity if your home is still underwater. The government has extended the Mortgage Debt Relief Tax Forgiveness Act through 2013 and most experts agree it is unlikely that it will be extended further.
If you are interested in either refinancing or listing your home as a short sale, contact me for more information.