LAS VEGAS The promise of palm trees and low-priced real estate lured Alan and Katherine Ackerly across the Rocky Mountains from Denver to Nevada in 2004, where thousands of new houses beckoned brightly.
Julie Jacobson, The Associated Press
Contractor Alan Ackerly on a job site in Las Vegas. Ackerly’s house is among a growing crop of empty homes in Nevada.
Julie Jacobson, The Associated Press Contractor Alan Ackerly on a job site in Las Vegas. Ackerly’s house is among a growing crop of empty homes in Nevada.
They came to buy their retirement home. But the real estate bust took its toll, with a flood of short sales and foreclosures in the market, and last month the Ackerly’s dream home was foreclosed on.
“I pretty much gave it back to them,” says Alan Ackerly, a 57-year-old electrician who stopped paying his mortgage because he owed more than the house was worth.
The Ackerly’s home is now among a swelling number of abandoned houses in Nevada. There were 167,564 empty houses in the state last year, according to newly released U.S. Census data, more than double the number in 2000. The number of vacant homes represents about one of every seven houses in Nevada.
The figures are a striking example of how the housing crisis has pummeled Nevada, casting a new light on the severely weakened market after years of boom.
One result is an increase in code violations. In Clark County, home to Las Vegas, neighbors call to complain of abandoned houses, stagnant pools, wild yards and unsecured doors, says Joe Boteilho, the county’s code enforcement chief.
Such complaints nearly doubled from 2008 to 2009, as the median price of resale homes dropped to $115,000 in January.
It has been a deep plunge for Nevada. Once a leader in job creation and construction, the state had the highest foreclosure rate in the country in January. And delinquent mortgages are on the rise, with Las Vegas, Reno and Carson City among the top eight cities per capita in a national real estate study published last month.
More than 16% of Nevadans relocated within the state in 2008, highest mobility rate in the nation, the Census data shows.
“We were the hottest market in the nation in terms of the shape of the bubble, how fast it went up,” said Nasser Daneshvary, director of the Lied Institute for Real Estate Studies at the University of Nevada, Las Vegas. “And, of course, when something goes up, it comes down hard, too.”
The growth fueled by tourism and the gaming industry has yielded few winners. Short sales and foreclosures have slashed homes prices, ravaged neighborhoods and fueled unemployment in the construction sector, one of Nevada’s primary industries. The jobless rate is 14.2%, and the state’s estimated budget gap starts at $1.5 billion.
In Fernley, fastest growing city in Nevada from 2000 to 2010, the only sign of construction in recent months was a new Walgreens and a Catholic church. One in 49 homes is in foreclosure.
“It was just very explosive,” says Mayor LeRoy Goodman. “We hit bottom.”
This in what was once the land of plenty. The expansion of glass towers and sprawling casinos on the Las Vegas Strip saw a 3.8% unemployment rate statewide in the beginning of 2000. Over the next decade, Nevada would grow by 35%, fastest rate in the nation.
Men and women in hard hats carved homes into mountainsides, raised superstores from the dust and wedged plush golf courses into the desert. The state’s residential properties grew by more than 40% to 1.17 million homes during those years, affording Nevada the youngest housing stock in the country in 2009, according to the Census data. In Clark County, the school district saw an average of 10 new schools a year at its peak.
As houses and condominium towers rose, so did prices. The median home price went from $150,000 to $300,000 between 2000 and 2007, according to the University of Nevada, Las Vegas.
“It was a new town,” says Dennis Smith, president of Home Builders Research, a Las Vegas real estate firm. “There was money everywhere. Everyone wanted to invest in Vegas.”
The state’s growing wealth and relaxed lending practices allowed workers with limited incomes to buy homes. In many cases, these were the same people who later faced foreclosure.
Most Nevadans who lost their homes earned between $24,000 and $72,000 a year, according to a homeowners survey by the Nevada Association of Realtors. About 60% said they lost their jobs, then their homes.
The crash came in 2008, when unemployment passed 7% for the first time during the decade.
Even so, nearly 74,000 homes were built in 2010, according to Census data. Realty companies say there are still buyers who prefer newly-built houses.
A general recovery seems far away. The state’s Foreclosure Mediation Program helped more than 4,200 homeowners since its creation in 2009. Nearly 2,000 of those owners were able to keep their homes.
Short sales and foreclosures are projected to further depress homes values across Nevada in 2011. Census data to be released starting in June are expected to highlight the state’s robust renters’ market.
“This year will be the worst,” says Rep. Shelley Berkley, D-Las Vegas, who co-chairs the Democratic Caucus Housing Stabilization Task Force in Washington. “The unemployment rate is not going down. The values of the homes keep going down, and the ability to pay your mortgage is just not there.”
The Ackerly family moved into a rental house after they defaulted on their mortgage. The value of their $240,000 North Las Vegas home was $80,000 by the time they left. Unlike some of their neighbors, they didn’t take the new kitchen cabinets, or the palm trees they had planted in the yard, or any of the other improvements they made to the house after they moved in.
“We were done with it,” says Alan Ackerly.
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Article source: http://www.usatoday.com/money/economy/housing/2011-03-26-nevada-real-estate.htm
