Nevada has the highest foreclosure rate in the country.
The promise of palm tree groves and low-cost real estate lured Alan and Katherine Ackerly across the Rocky Mountains in 2004 from Denver to Nevada, where thousands of new houses beckoned as brightly as any neon sign.
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 Ackerlys’ dream home was foreclosed on, too.
“I pretty much gave it back to them,” said Alan Ackerly, a 57-year- old electrician who stopped paying his mortgage because he owed more than the house was worth.
The Ackerlys’ 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 census data, more than double the number in 2000. The number of vacant homes represents about one out of every seven houses across Nevada.
The figures are another 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, such complaints nearly doubled from 2008 to 2009 and 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 nation’s highest foreclosure rate in February. One in every 119 households was in foreclosure, up 22.10 percent from January.
Delinquent mortgages, meanwhile, are on the rise, with Las Vegas, Reno and Carson City all in the top eight cities per capita in a national real estate study published last month.
More than 16 percent of Nevadans relocated to new residences within the state in 2008 alone, the highest mobility rate in the nation, Census Bureau figures show.
“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. The jobless rate is 14.2 percent, and the state’s estimated budget gap starts at $1.5 billion.
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 percent unemployment rate statewide in the beginning of 2000. Over the next decade, Nevada would grow by 35 percent, the 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 percent to 1.17 million homes during those years. In Clark County, the school district saw an average of 10 new schools a year at its peak.
As houses and condo towers rose from the ground, so did prices. The median home price went from $150,000 to $300,000 between 2000 and 2007, according to a UNLV study.
“It was a new town,” said 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 gain home ownership. 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, according to a homeowners survey published by the Nevada Association of Realtors in January. Roughly 60 percent said they lost their jobs first, then their homes.
The crash came in 2008, when unemployment passed 7 percent for the first time during the decade.
A general recovery seems far away. The state’s Foreclosure Mediation Program has helped more than 4,200 homeowners since its creation in 2009. Nearly 2,000 of those owners have been able to keep their properties.
More short sales and foreclosures are projected to further depreciate home values across Nevada in 2011. Census data to be released starting in June is expected to highlight the state’s robust renters’ market.
The Ackerlys 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 lovingly made to the house after they moved in.
“We were done with it,” Alan Ackerly said.
Via Denver Post