Tuesday, Oct. 28, 2008 | 2 a.m.
- State plan could ease pressure of ‘tsunami’ (10-23-2008)
- Reid, Goodman tour foreclosed homes, present remedy (10-22-2008)
- Bill to protect renters in foreclosure cases (10-20-2008)
Fifty-eight percent of the houses for sale in the Las Vegas Valley are empty, the highest such figure in the three decades such information has been gathered, said Larry Murphy, president of SalesTraq, a firm that compiles real estate data.
Not only that, there are about 7,500 foreclosed houses that banks haven’t even put on the market, so the statistic could soon become even more stunning, according to Jeremy Aguero of the research firm Applied Analysis.
The implications range from the economic to the sociological, from depressing property values to rending the social fabric of neighborhoods, experts said.
Brokers offered nearly 21,000 valley homes for sale in September and about six of every 10 were vacant, Murphy said. He said he didn’t know how many of those were bank-owned properties that have gone through foreclosures, but he figures most of them are.
The valley reached this point, plain and simple, due to greed, said Marketing Solutions’ Steve Bottfeld.
“If you look at foreclosed lists, you will find the same names with multiple listings,” he said. “Investors got greedy, thinking, ‘We’re going to make millions. We’re going to treat housing as a commodity.’ ”
Then those owners couldn’t rent them for enough to cover the mortgage payments.
Making matters worse, companies built more houses than were needed, about 40,000 in 2006, when 25,000 might have met the need, Bottfeld said.
Add to that the subprime mortgage mess and, several years later, you get to the ghost-town effect you now see along some blocks in the valley, with empty houses like the missing teeth in a Halloween pumpkin.
This then presses prices of the surrounding real estate downward, Bottfeld said. “There’s a huge pressure to get rid of the houses,” he said.
Aguero said the oft-cited “broken window effect” has double meaning in the present situation — its intended social meaning, linked to more crime and less neighborliness, as well as the economic meaning Bottfeld cites.
Michael Ian Borer, a UNLV sociology professor, noted that communities are formed by social ties.
“How can you maintain social ties in a community with so many gaps?” Borer said. “How can you maintain connections between people when there are no people?”
In the present situation, he said, some neighborhoods may become “a space and not a place.”
The result is “people become isolated,” he said.
And this in an urban setting that already faced challenges when it comes to building relationships because of its relentless growth, he added.
Bottfeld said the only good to come from so much bad may be that “prices are sliding to the point where those houses are going to get snatched up.” The monthly totals for existing home sales have gone up for seven consecutive months.
The sinking median price for existing homes, at $186,500 in September, means “we are closing in on housing become affordable again,” considering that average family income is about $60,000, Bottfeld added.
Aguero is less sanguine about what will put people in houses again:
“Nothing but time.”