Las Vegas Foreclosures Surged Despite Spike in Short Sales

by Donald Hanz on Foreclosures

Las Vegas foreclosures still surged despite spikes in foreclosure short sales in March. More than 28,000 Las Vegas households received notices of default, foreclosure sales and repossession despite the nearly 9,000 short sales put in escrow in Greater Las Vegas during the month.

In the first quarter, Las Vegas continued to lead other metro areas in foreclosure rate in the country, with one foreclosure filing for every 28 residential units, almost five times the nationwide average rate.

Meanwhile, based on records from a Nevada-based real estate title company, the percentage of short sales has been rising in Las Vegas, and the sharp increases were expected to cut down foreclosure filings in the area. In March, a total of 8,586 short sales in Nevada, where Las Vegas is located, were in escrow, almost four times the 2,234 bank owned house foreclosures in escrow during the month.

The surge in short sales, however, was not overwhelming enough to make a big swath on foreclosures. The number of completed short sales in March, which totaled to 690, was lower by 51.4 percent than the 1,419 real estate owned units that got sold.

In the first quarter, the total number of Las Vegas foreclosures filed by lenders reached 28,480 filings, marking a jump of 13 percent from the previous quarter. The number, however, was lower by 19 percent than the total of filings in the first quarter last year.

Based on information from some members of the Greater Las Vegas Association of Realtors, about 50 percent of homes listed on the Multiple Listing Service currently are short sales and about 25 percent are bank owned homes. These percentages indicate the rising number of homeowners choosing to lose their homes through short sales and not through foreclosure.

Local realtors contend that short sales could surpass the percentages of foreclosure sales by the last months of the year. They point to the decline in the percentage of foreclosure sales from 80 percent to about 50 percent over the past 15 months and the increase in the percentage of short sales from only about 8 percent at the start of the housing crisis to 25 percent this year.

The incentives offered to lenders, servicers and homeowners under the Home Affordable Foreclosure Alternatives program is among the major drivers driving the surge in short sales.

Nonetheless, investors looking for Las Vegas foreclosures and other cheap houses can still find plenty of foreclosed homes, as Las Vegas kept posting the highest foreclosure rate among metro areas in the country in the first months of this year.