Wednesday, November 23 2011 6:24 PM EST2011-11-23 23:24:17 GMT
As go the numbers, so does the economy. While the numbers, rankings, and data crunching does not truly convey the human cost of the housing implosion and recession, they can give us clues as to why things happen, the scope and scale of the problem and when we might recover.More>>
Wednesday, November 16 2011 7:59 PM EST2011-11-17 00:59:37 GMT
State-run welfare programs have seen their caseloads skyrocket since the economy tanked. According to the Nevada Division of Welfare and Supportive Services, there were 279,840 Medicaid recipients statewideMore>>
UNLV Economics Professor Nasser Daneshvary, director of the university's Lied Institute for Real Estate Studies, estimates that banks have foreclosed on 75,000 homes in Clark County since 2008 and that there have also been about 20,000 short sales since then.More>>
There was a significant decline in the number of mortgage default notices served on homeowners in the Las Vegas metro area and in Nevada in October, but not because of a sudden recovery in the housing market. Although, foreclosure activity data does appear to show a longer-term improvement trend. More>>
Property tax revenue for Clark County, Las Vegas, Henderson and North Las Vegas rose rapidly from fiscal 2005 before peaking in fiscal 2009, and then heading over the cliff.More>>
HOUSING BUBBLE Home prices peaked in the Las Vegas metro area in April 2006, according to the S&P/Case-Shiller Home Price Index. The Office of Federal Housing Enterprise Oversight similarly found that the home price peak in Nevada occurred in the second quarter of 2006. According to the Federal Housing Finance Agency, a home purchased in Las Vegas for $200,000 in the second quarter of 2001 would have been valued at $410,192 in the second quarter of 2006. But a $200,000 home purchased in the second quarter of 2006 would have been worth only $81,953 in the second quarter of 2011. Nevada led the nation with a 58.1 percent drop in home prices from June 2006 through June 2011, according to the FHFA, and had the nation's fourth highest decline, 13.4 percent, from June 2010 to June 2011. The price decline has been so sharp that FHFA found Nevada home prices increased only 13.6 percent in value from March 1991 to June 2011, by far the lowest appreciation rate in the nation. The average U.S. home values during that period increased 79.6 percent. S&P Case-Shiller similarly reported that home prices in Las Vegas in August 2011 were 59.5 percent below their peak five years ago. The Greater Las Vegas Association of REALTORS reported that the median price of single-family homes sold in Las Vegas in September was $123,400, up 2.8 percent from $120,000 in August.. The median price of condominiums and townhouses sold in September was $56,500, up 0.9 percent from $56,000 in August. But in October the median price of homes sold dipped 1.9 percent to $121,000 and remained 9 percent below last year's prices. Townhouses and condos fetched a median $59,000 in October, 4.4 percent better than the prior month but 9.2 percent below a year ago.
FINANCIAL COLLAPSE Nevada's economy began slowing down by late 2006 but it wasn't until March 2008 when unemployment noticeably increased, reaching a six-year high, according to the Nevada Department of Employment, Training and Rehabilitation. Things went rapidly downhill until mid-2010 when segments of Nevada's private sector showed signs of life. By March 2011 signs of economic recovery were such that the number of jobs in the state increased on a year-over-year basis for the first time in more than three years. But while job losses subsided the state agency concluded in August that the job picture still wasn't good enough to drive the unemployment rate downward.
UNEMPLOYMENT The unemployment rate in the Las Vegas metro area, a placid 4 percent in September 2005, rose steadily to 7.7 percent in 2008 before skyrocketing to 13.5 percent in September 2009 and 15.6 percent last year. It dropped to 13.6 percent in September 2011, meaning it's better than last year but slightly worse than two years ago. And it is also the nation's highest unemployment rate among cities with at least 1 million people. The statewide unemployment rate of 13.4 percent in September also remained tops in the nation. After hitting a peak of roughly 925,300 jobs in September 2006, the Las Vegas job market hit a bottom of 798,000 jobs last year before rebounding slightly to roughly 806,000 jobs in September 2011. The job increases in 2011 over 2010 have been in leisure/hospitality, professional/business services and education/health-related fields. But the job market continues to shrink for workers in construction, manufacturing, trade/transportation/utilities, financial activities and government. The sharpest decline has been in construction, which had nearly 110,000 jobs in September 2006 but only about 42,000 this September. Government jobs, hitting a peak of 101,700 in September 2008, fell to 92,700 this September.
BANKRUPTCY Nevada rose to tops in the nation with 11.23 bankruptcy filings per 1,000 residents in 2009 and remained number one last year with 11.1 filings per 1,000 residents, according to CreditCards.com. The number of bankruptcy filings in Clark County, 12,124 in fiscal 2008, more than doubled to 25,303 by fiscal 2010 before dropping somewhat to 22,839 in the fiscal year that ended in June, according to the U.S. Bankruptcy Court. The bulk of the filings have been for Chapter 7, which is a court-supervised liquidation of one's assets to satisfy creditors. Those filings more than doubled from 7,557 in fiscal 2008 to 18,405 in fiscal 2010 before dipping to 17,050 last fiscal year.
PROPERTY TAX REVENUE Property tax revenue for Clark County, Las Vegas, Henderson and North Las Vegas rose rapidly from fiscal 2005 before peaking in fiscal 2009, and then heading over the cliff. Clark County's property tax revenue, $383.1 million in fiscal 2009, fell to $274.9 million last fiscal year, ending in June. But North Las Vegas has been hit the hardest, which explains its massive job layoffs. After collecting $85.8 million in property taxes in fiscal 2009, North Las Vegas expects to collect only $49.8 million in the current fiscal year, a drop of 42 percent. By comparison, the drops in Las Vegas, Clark County and Henderson are 31.8 percent, 28.2 percent and 26.3 percent respectively. North Las Vegas residential property, valued at $15.8 billion in fiscal 2009, is only valued at $7.6 billion this fiscal year. Likewise, residential property values plunged in Clark County from $181.9 billion in fiscal 2009 to $98.5 billion this year while Henderson residential values dropped from $33.2 billion to $19.1 billion over the same period. Las Vegas residential property value, which peaked at $52.2 billion in fiscal 2008, is now at $27.2 billion.
TAXABLE SALES Clark County taxable sales, which peaked at nearly $36.3 billion in fiscal 2007, plunged 22.9 percent to $28 billion in fiscal 2010 before rebounding somewhat to slightly more than $29 billion for the fiscal year that ended in June. Using fiscal 2005 as a baseline, places that serve food or drinks or provide lodging for travelers have seen taxable sales rise from $6.7 billion to nearly $7.9 billion. Places that sell clothing or accessories have also seen taxable sales rise from $1.8 billion to nearly $3 billion. But the businesses that have taken the biggest hits include motor vehicle/parts dealers, with taxable sales down from $4.7 billion to $2.7 billion, building material/garden equipment, down from $2.2 billion to slightly less than $1 billion, and furniture/home furnishing stores, which plunged from $2 billion to $540 million. Food and beverage retailers and general merchandise stores are at basically flat taxable sales revenues.
UNDERWATER MORTGAGES As of June, the Las Vegas metro area led the nation with 63.3 percent of its mortgages underwater (269,560 of 425,579 homes), according to CoreLogic, a real estate analytics company in Santa Ana, Calif. Las Vegas as of June also had the nation's largest mortgage debt to residential property value ratio at 119.7 percent, with $85.9 billion in mortgage debt for property valued at only $71.8 billion, a deficit of $14.1 billion. That means that for every $1 of property value, Southern Nevada homeowners with mortgages owe nearly $1.20. Among the nation's top 50 metro areas, Orlando, Fla., was the only other one that carried more mortgage debt than its property is worth but its deficit is a mere $142 million.
VACANCY RATES Only 2 percent of Clark County's single-family homes were vacant in 2000 but the vacancy rate hit a peak of 6.4 percent in 2008, dipped to 5.2 percent in 2009 and rose again to nearly 5.8 percent last year. Multi-family units, which had a 6.5 percent vacancy rate in 2000, hit a peak vacancy rate of 11.5 percent last year.
TOP LENDERS As housing prices in the Las Vegas metro area peaked in 2005-2006, the biggest mortgage lender by far was Countrywide Financial Corp. Countrywide, which found itself in the center of the subprime lending crisis as the nation's biggest mortgage lender, issued $28.6 billion in residential loans in that two-year period, according to In Business Las Vegas. That included 72,954 loans to purchase homes and 42,015 to refinance loans. If you also include 2007-2008, the next biggest lender from 2005-2008 was Bank of America at $18.8 billion, followed by Wells Fargo Bank at $16 billion. With Countrywide on the brink of bankruptcy due to a tidal wave of mortgage defaults, Bank of America bought Countrywide in 2008 for $4.1 billion to become the nation's largest mortgage lender and loan servicer. But as Forbes.com reported in October, Bank of American now faces at least $60 billion in mortgage-related litigation, much of it tied to Countrywide's portfolio.
UNLV Economics Professor Nasser Daneshvary, director of the university's Lied Institute for Real Estate Studies, estimates that banks have foreclosed on 75,000 homes in Clark County since 2008. Foreclosures represent another category were Nevada leads the nation, with only 44 housing units for every foreclosure-related filing from July through September, according to RealtyTrac.com. The Las Vegas metro area also led the nation's cities in July-September with one filing per 39 housing units. Nevada had 25,900 filings during that three-month period, a number that includes notices of default, notices of trustee sales and properties repossessed by banks. That included 21,254 filings from the Las Vegas area. In September alone, Nevada had one filing for every 118 housing units, more than five times the national average of one filing per 605 homes. In September Clark County had 7,942 filings, or one for every 103 homes. The city with the heaviest foreclosure activity by far is North Las Vegas, which had one filing for every 53 homes. By comparison Las Vegas had one filing per 110 homes and Henderson had one filing per 101 homes. Foreclosure filings, particularly default notices, declined sharply in October due to a new state law effective Oct. 1 that forces banks to file certain paperwork with the county recorder before proceeding with a foreclosure. Las Vegas fell from the top spot in the rate of foreclosure to number five among the nation's metro areas due to the new law, RealtyTrac reported. But Nevada remained tops among states for the 58th straight month.
According to ForeclosureRadar.com, the total number of housing units in Clark County as of October that received notices of default but weren't yet scheduled for sale by the lender stood at 34,235. The new law helped cause that number to drop from September. But the more noticeable trend is the declining volume of defaulted housing units set for sale. This number fell from 15,222 in December 2010 to 6,995 in October. Also, the number of bank-owned housing units in October was 11,081, the lowest it had been since February.
ForeclosureRadar.com reported that the average amount owed on homes sold by banks at auction rose from $276,000 in October 2010 to $310,000 in October. The winning bids at bank auctions averaged only $166,000 in October. RealtyTrac.com, using different methodology, calculated that average bank-owned housing units fetched $332,306 in the third quarter of 2006 but only $115,604 from April through June 2011.
RealtyTrac also reported that the number of Clark County short sales of housing units in default or scheduled for bank sale rose from 659 in the first quarter of 2007, about the time the subprime loan bubble was beginning to burst, to 9.622 in the first quarter of 2009. From January 2007 through June 2011 there were 63,858 short sales in the county. Average short sale prices also plummeted from $367,876 in the first quarter of 2006 to $124,702 in the second quarter of 2011. RealtyTrac also reported that more than 66 percent of the housing units sold in the county in the second quarter of 2011 represented short sales or bank sales. Back in the first quarter of 2005, when times were good, that was true of only one-quarter of 1 percent of the sales.
HARDEST HIT ZIP CODES The Clark County zip codes with the highest volume of foreclosure activity as of September, according to ForeclosureRadar.com, were:
1. 89031 -- This North Las Vegas zip code had 1,723 housing units with notices of default, by far tops in the county. It also had 581 bank-owned housing units, also by far most in the county. It is bordered by Craig Road to the south, Decatur Boulevard to the west, Centennial Parkway to the north and N. 5th Street to the east.
2. 89117 -- This Las Vegas zip code, which includes Peccole Ranch, had 1,454 housing units with notices of default. It is bordered by Charleston Boulevard to the north, Hualapai Way to the west, Spring Mountain Road to the south and Rainbow Boulevard to the east.
3. 89131 -- This Las Vegas zip code, which includes Floyd Lamb State Park, had 1,358 housing units with notices of default. It is bordered by Centennial Parkway to the south, Decatur Boulevard to the east, Moccasin Road to the north and Durango Drive to the west.
4. 89178 -- This Las Vegas zip code, in the southwest corner of the valley, had 1,328 housing units with notices of default. It is bisected by Blue Diamond Road.
5. 89123 -- This Las Vegas zip code, with 1,248 housing units in default, is bordered by Interstate 15 to the west, Silverado Ranch Boulevard to the south, Eastern Avenue to the east, and Warm Springs Road to the north.
6. 89108 -- This Las Vegas zip code, with 1,161 housing units in default, also had 483 bank-owned housing units, second most in the valley. It is bordered by U.S. 95 to the west, Washington Avenue to the south and Rancho Drive to the northeast.
The Clark County zip codes with the fewest number of housing units per filing in September, according to RealtyTrac.com, were:
89011 --This Henderson zip code, which includes Lake Las Vegas, had one filing for every two housing units. It is bordered by Lake Mead Parkway to the south and Interstate 515 to the west.
89148 --This Las Vegas zip code, which includes Rhodes Ranch, had one filing for every four housing units. It is bordered by Tropicana Avenue to the north, Durango Drive to the east, Fort Apache Road/Hualapai Way to the west and a portion of Torino Avenue to the south.
89139 -- This Las Vegas zip code had one filing for every six housing units. It is bordered by Interstate 15 to the east, Warm Springs Road to the north, Rainbow Boulevard to the west and Silverado Ranch Boulevard to the south.
FORECLOSURE MEDIATION From September 2009 through June 2011, the Foreclosure Mediation Program overseen by the Nevada Supreme Court had completed 12,556 mediations. Of those, 1,499 or 12 percent resulted in foreclosure and 11,057 or 88 percent avoided foreclosure. Of those who avoided foreclosure, 5,578 reached an agreement with the lender and 5,479 did not. Of those who reached agreement, 3,686 or 66 percent remained in the home and 1,892 or 34 percent vacated the home.
MORTGAGE FRAUD The FBI ranked Nevada as the third riskiest state for mortgage fraud activity in 2010, trailing only Florida and California. The FBI field office conducted 292 mortgage fraud investigations last year, by far most in the nation. The Treasury Department's Financial Crimes Enforcement Network also reported that Nevada produced the nation's third highest volume of mortgage loan fraud suspicious activity reports from April through June, 29.7 per 1 million residents. The Las Vegas metro area also was rated in June as the nation's fifth riskiest city for mortgage fraud activity, according to Interthinx, a risk assessment research firm in Agoura Hills, Calif.
FEDERAL PROGRAMS Though there were 269,560 homes with underwater mortgages in the Las Vegas metro area in June, according to real estate analytics firm CoreLogic of Santa Ana, Calif., one of the federal government's most highly publicized mortgage assistance programs, the Home Affordable Modification Program, had produced only 14,327 permanent loan modifications in the Las Vegas area through August, with an additional 2,076 homeowners going through the program on a trial basis. Other housing assistance programs that are financed under the federal government's Hardest Hit Fund had only helped 115 Nevada homeowners as of June. Nevada had been promised $194 million from this fund last year but had received only $7.45 million as of June and spent only $631,796, with lenders/servicers also spending $1.1 million.
WELFARE State-run welfare programs have seen their caseloads skyrocket since the economy tanked. According to the Nevada Division of Welfare and Supportive Services, there were 279,840 Medicaid recipients statewide in fiscal 2011, compared to only 167,795 in fiscal 2007 before the economy soured. That's a 66.8 percent increase. In fiscal 2011, there were 104.5 Medicaid recipients per 1,000 residents, compared to only 62.9 recipients per 1,000 in fiscal 2007. Caseloads rose 6.3 percent in fiscal 2008, 10.5 percent in fiscal 2009, 22.1 percent in fiscal 2010 and 16.3 percent in fiscal 2011. Medicare caseloads, relatively flat in the middle part of the last decade, rose 60 percent from 12,525 in fiscal 2006 to 20,048 in fiscal 2011. The Supplemental Nutrition Assistance Program, which provides food assistance, had 321,753 recipients in fiscal 2011, a 169 percent increase over the 119,596 recipients in fiscal 2007. There were 120 program participants per 1,000 residents in fiscal 2011 (12 percent of the state population) versus 44.7 recipients per 1,000 in fiscal 2007 (4.5 percent of the population). The Child Health Assurance Program, which provides Medicaid to children and pregnant women, had 79,215 recipients in fiscal 2011, 176.3 percent more than the 28,674 served in fiscal 2007.
POOR CREDIT Nevada has the nation's second lowest average credit score, 655, fairing better than only Texas, 651. That's according to CreditReport.com, owned by a subsidiary of consumer credit reporting company Experian.