Silver State's residential real estate was wounded badly in the bubble that burst so spectacularly some time ago. Of course it's not alone in it but that's scant relief. Sales at least in Las Vegas have slowed to a crawl, although especially resales have picked up lately, prices have headed south and the inventory is still high. Now another statistic is published to inform how deeply the housing mess has affected the state.
Nevada tops the list that ranks states by how many homes each has upside down, meaning the existing mortgage balance is higher than the property is worth. This marvel is also called being under water. The figures were provided by First American CoreLogic that estimates that 48% of single-family houses here are caught in this menacing vise. An unpleasantly high number. The comparable national number is 18%.
Some homeowners are more upside down than others. When one can be so by $20,000, another across the street could be on the hook by $150,000. It's the latter that makes people really think what to do about it, if anything. To wait for the market to narrow that discrepancy can take a long while. Unfortunate life-changing events can come into play, an illness, job loss, a move, and force a household's hand that requires a sale. But who has that sort of money, $150,000 to be exact in this example, to take to the closing table to make up for being that much under water?
This First American estimate likely mirrors conditions in population-heavy Las Vegas more than the rest of the state. It's of course news the city could do without. One thing is worth remembering, however. Real estate speculators were all over the valley during the boom and those who joined in too late are now owners of vacant investment properties they can't sell or rent. Therefore, although it's hard to be accurate, it could be that up to half of these under-water houses are owned by them. What are they likely to do is easy to guess?