Is There a Las Vegas Foreclosure Crisis Happening?
Foreclosure Numbers Today Aren’t Like 2008
Are you considering entering the exciting Las Vegas real estate market? With all the recent news about foreclosures, it's natural to feel uncertain. But let's dive into the facts and put things into perspective so you can make informed decisions.
Foreclosure filings are up
According to a recent report from ATTOM, a property data provider, foreclosure filings have seen a 2% increase compared to the previous quarter and 8% compared to last year, making headlines and raising concerns. However, it's crucial to understand the context to see the real picture.
In recent years, the number of foreclosures reached record lows due to relief programs like the forbearance program, which helped millions of homeowners keep their homes during challenging times. Additionally, rising home values allowed many homeowners to tap into their equity and sell their properties instead of facing foreclosure.
As the government's moratorium ended, an expected rise in foreclosures occurred. But don't panic—this doesn't mean the housing market is in trouble. Experts have emphasized that this situation is different from the Great Recession. Most homeowners now have a comfortable equity cushion in their homes, and foreclosures are not flooding the market as they did back then.
As Clare Trapasso, Executive News Editor at Realtor.com, says:
“Many of these foreclosures would have occurred during the pandemic, but were put off due to federal, state, and local foreclosure moratoriums designed to keep people in their homes . . . Real estate experts have stressed that this isn’t a repeat of the Great Recession. It’s not that scores of homeowners suddenly can’t afford their mortgage payments. Rather, many lenders are now catching up. The foreclosures would have happened during the pandemic if moratoriums hadn’t halted the proceedings.”
To illustrate the contrast, check out the graph below, showing foreclosure activity in the first half of each year since 2008. You can see that current foreclosure levels are significantly lower than during the housing crash.
While foreclosures are increasing, the overall foreclosure activity is nowhere near the crisis levels experienced during the housing bubble burst. Buyers today are more qualified and less likely to default on their loans, contributing to a more stable market.
In a recent article, Bankrate also explains:
“In the years after the housing crash, millions of foreclosures flooded the housing market, depressing prices. That’s not the case now. Most homeowners have a comfortable equity cushion in their homes. Lenders weren’t filing default notices during the height of the pandemic, pushing foreclosures to record lows in 2020. And while there has been a slight uptick in foreclosures since then, it’s nothing like it was.”
If you're looking to buy, sell, or invest in Las Vegas real estate, remember to put the data into context. While there's an expected rise in foreclosures, it's not a cause for alarm. The housing market remains robust, and prices are not likely to crash. Las Vegas continues to be an attractive and lucrative real estate market with ample opportunities for savvy buyers, sellers, and investors.
Make your move in the Las Vegas real estate market with confidence, and seize the opportunities that await you!