We all know that the last few years have been very difficult for all of us who own real estate in Las Vegas. The market has fallen as much at 80% in some areas of the Las Vegas valley. Here at the Regent, prices have dropped to around 27 cents on the dollar from original pricing and as low as 19 cents on the dollar from the highs of 2007 states a local article regarding the Regent Complex.
Most analysts feel that we are in for a long ride before property values are anywhere close to the levels of 2007. At the April meeting of the Real Estate Insiders Club here in Las Vegas, Mary Riddel, Associate Professor of Economics at UNLV, made it clear that she believes we are in for about 8-12 years before we see any substantial appreciation in real estate values in the Las Vegas Market.
In comparison, Obama’s Home Affordable Modification Program (HAMP) has met with limited success — to put it gently. More than 75% of the 170,000 borrowers who’ve used the program are under-water — owing more to the banks than their homes are even worth, ever since the housing bubble burst and values crashed — while last year, lenders foreclosed on 2.8 million homes states a national article in the Huffington Post.
It’s sad, but increasingly evident, that the best decision for many borrowers is simply to get out from under the heavy burden of too-costly mortgages by trying to sell-short. A short-sale won’t whack a credit rating nearly as severely as a foreclosure, and holding onto a house by the skin of one’s teeth often results in paying more money to the bank in the long run, before an inevitable forfeiture of one’s home.
Last quarter, more homeowners voluntarily defaulted on their mortgages and chose to walk away from their homes than the total number of mortgages permanently modified to date under the Administration’s year-old Home Affordable Modification Program (HAMP) states an article in UPI.
According to new data from the team of researchers at the University of Chicago and Northwestern University that first identified the scope of “strategic default” behavior last year, the number of homeowners willing to default when the value of a mortgage exceeds the value of their house, even if they can afford to pay their mortgage, has dramatically increased compared to just a year ago.