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Las Vegas House Bargains Dry Up - WSJ.com
LAS VEGAS—Jonathan Griffin, Michael Pawlak and Chris Iuso all are chasing bargains on foreclosed homes here.
It should be easy. Las Vegas is one of the foreclosure capitals of the U.S., with about one in four households behind on house payments or in mortgage foreclosure. Yet all three of these shoppers—a professional real-estate investor, a county official with federal funds designated for stabilizing neighborhoods and an installer of security systems who needs a new place to live—are frustrated.
"I thought it would be a heck of a lot easier," said Mr. Iuso, a renter who wants to buy a home but has been outbid eight times, usually by investors able to pay cash.
Bargain hunters here and in many other metropolitan areas are up against a paradox. By far the biggest wave of foreclosures since the Great Depression was expected to be a bonanza for anyone with cash or the ability to get a loan. But prospective home buyers say it is increasingly difficult to find foreclosed homes at attractive prices in desirable neighborhoods.
Supply is shrinking largely because of federal and state efforts to help millions of distressed homeowners avert foreclosure, which have delayed many likely foreclosures, keeping the homes off the market for now.
The bargain chase is even tougher for those buying with a loan. Investors with cash have an advantage in that their offers aren't conditional on obtaining a loan so banks often prefer selling to them than taking the risk that another offer will fall through. They are also often quick to react when bargains appear.
So while it is still relatively easy to find a home for a few thousand dollars in Detroit, few want to move there. In the more-desirable Orange County, Calif., bidding wars are the norm on foreclosed homes.
Although the percentage of borrowers behind on payments continues to grow, the number of homes lost to foreclosure in California—and thus available for resale—fell 19% in 2009 from a year earlier to 190,360, according to MDA DataQuick, a real-estate data provider. The number of foreclosed homes owned by banks or mortgage investors and available for sale nationwide dwindled to 617,000 in December from a peak of 845,000 in November 2008, estimates Barclays Capital.
To those frustrated by the drop in supply, John Burns, a prominent real-estate consultant based in Irvine, Calif., counsels: "Just be patient. They're coming." His firm, John Burns Real Estate Consulting, estimates that five million households, currently behind on mortgage payments, will end up losing their homes, dumping supply on the market over the next few years. In Las Vegas, this "shadow" inventory of pending supply is enough to last 18 months, the firm estimates.
The article continues at the link above. I thought this is a good piece of information for US and foreign investors interested in investing in Las Vegas real estate.
LAS VEGAS—Jonathan Griffin, Michael Pawlak and Chris Iuso all are chasing bargains on foreclosed homes here.
It should be easy. Las Vegas is one of the foreclosure capitals of the U.S., with about one in four households behind on house payments or in mortgage foreclosure. Yet all three of these shoppers—a professional real-estate investor, a county official with federal funds designated for stabilizing neighborhoods and an installer of security systems who needs a new place to live—are frustrated.
"I thought it would be a heck of a lot easier," said Mr. Iuso, a renter who wants to buy a home but has been outbid eight times, usually by investors able to pay cash.
Bargain hunters here and in many other metropolitan areas are up against a paradox. By far the biggest wave of foreclosures since the Great Depression was expected to be a bonanza for anyone with cash or the ability to get a loan. But prospective home buyers say it is increasingly difficult to find foreclosed homes at attractive prices in desirable neighborhoods.
Supply is shrinking largely because of federal and state efforts to help millions of distressed homeowners avert foreclosure, which have delayed many likely foreclosures, keeping the homes off the market for now.
The bargain chase is even tougher for those buying with a loan. Investors with cash have an advantage in that their offers aren't conditional on obtaining a loan so banks often prefer selling to them than taking the risk that another offer will fall through. They are also often quick to react when bargains appear.
So while it is still relatively easy to find a home for a few thousand dollars in Detroit, few want to move there. In the more-desirable Orange County, Calif., bidding wars are the norm on foreclosed homes.
Although the percentage of borrowers behind on payments continues to grow, the number of homes lost to foreclosure in California—and thus available for resale—fell 19% in 2009 from a year earlier to 190,360, according to MDA DataQuick, a real-estate data provider. The number of foreclosed homes owned by banks or mortgage investors and available for sale nationwide dwindled to 617,000 in December from a peak of 845,000 in November 2008, estimates Barclays Capital.
To those frustrated by the drop in supply, John Burns, a prominent real-estate consultant based in Irvine, Calif., counsels: "Just be patient. They're coming." His firm, John Burns Real Estate Consulting, estimates that five million households, currently behind on mortgage payments, will end up losing their homes, dumping supply on the market over the next few years. In Las Vegas, this "shadow" inventory of pending supply is enough to last 18 months, the firm estimates.
The article continues at the link above. I thought this is a good piece of information for US and foreign investors interested in investing in Las Vegas real estate.
