Las Vegas Tops List of Areas with Highest Foreclosure Rates at End of 2007

by Peter Vernon on cities, Foreclosure Rates

As more statistics on foreclosures at the end of 2007 are released and analyzed, it seems that a new city has claimed the burden of being the nation's foreclosure epicenter, and that city is Las Vegas.

Las Vegas, Nevada

Previously in the past year, Detroit was at the top of the list, largely due to low income families with adjustable rate and sub prime mortgages, as in many other parts of the country. However, company lay offs and a sluggish job market contributed to the cause as well. The Cleveland area also was in the lead for part of the year, for similar reasons. Cleveland was seen as a very interesting case, as it was one of the first cities that saw significant foreclosure prevail over all income brackets and neighborhoods, from the most poverty stricken urban areas to the most affluent suburbs.

But recent statistics show that 7 greater Las Vegas area zip code regions are among the top 100 zip codes with the highest rate of foreclosure in the country. North Las Vegas was the hardest hit of all areas. Officials are blaming this, not surprisingly, on adjustable rate mortgages and sub prime loans issued in the past few years. Las Vegas is one of the fastest growing cities in the nation, and during the real estate boom development and investment in real estate were at especially high levels. However, once the market fell off and these home simply sat on the market losing value, it actually became cheaper for many investors to simply let them slide into foreclosure than to keep up with the soaring monthly mortgage payments common with adjustable rate mortgages.

Low income homeowners who signed on for sub prime loans fell into a similar predicament. Lured by promises of low down payments and stable, low rates for the first year, many did not expect how hard it would be to keep up with interest rate adjustments every month, and so quickly fell into default.

However, it's important to remember that foreclosures are also great investment chances. Las Vegas is still growing, and once the market rebounds, these properties will go back up in value. Buying them through foreclosure sales now can net you up to 50% off their actual market value, which means an incredible chance for future profits.