Las Vegas is the city of dreams, where gamblers come from across the world to the best casinos in the United States. A city filled with lights and glam, people are finding riches in places outside of the casino: homes.
Las Vegas’ foreclosure numbers look good on paper, but when you take a closer look, they’re starting to rise. It’s true that foreclosure-related filings were down 40% last year.
The ramp up of foreclosures is starting in 2018. Why? If you look at the foreclosure numbers at the start of 2017, you’ll notice an average of 32 foreclosures a month. This is a low number of foreclosures, but lenders started to send out default notices in the final quarter of the year.
Default notices were sent to 500 homeowners per month on average.
Senate Bill 490
Nevada introduced Senate Bill 490, which went into effect in June 2017. The bill makes the state’s Foreclosure Mediation Program permanent, and while the administration for the program started to materialize, lenders stopped foreclosure activity.
Lenders were again able to proceed with foreclosures in November, as Home Means Nevada became operational.
Banks are now going to increase their default notices and start getting their own finances in order. This means that repossession of homes is likely to increase.
During the fourth quarter of the year, 160 homes on average went into repossession, up from 100 in the third quarter.
But the good news is that these figures are still lower than the 293 homes that were repossessed monthly in the first two quarters of the year.
Expected Rise in House Flipping
The Flipping Vegas Show ran through 2014, and it made Las Vegas a hotspot for house flippers. Investors flocked to the area to go to auctions, buy homes, fix them up and resell them. A major dip in the flipping market has occurred.
The lack of foreclosures has made most investors skip the auctions that were once filled with hopeful home flippers.
An uptick in the amount of foreclosures may help revive the flipping market. The issue at the current time is that there isn’t enough inventory to make a good investment. Discounts on properties have also started to disappear, making house flipping a much less lucrative option in Las Vegas.
Rising repossession rates should help alleviate some of the stress on house flippers.
Vegas is also known as a fast-moving real estate market where the popularity of areas increases and decreases rapidly. A lot of new flippers can’t flip a home in a month before the area may become less lucrative, causing them to lose money in the process.
Rising real estate prices is also a good thing and shows signs of a recovery from the recession. But the rise in prices has also caused many new homeowners to purchase homes that they may not be able to afford long-term.
Prices also demand a discount on auction properties, which we haven’t seen lately. Investors may fear that the cost for a fixer-upper is simply too high to justify flipping in the fickle Las Vegas market.