Foreclosures Worst In Nevada

June 3rd, 2008 | Tags: Foreclosures

RealtyStore is one of the leading online foreclosure data collectors in the country. It recently released reports on Nevada during the first quarter of 2008.

There were 17,307 default notices across Nevada Sate for the first three months of the current year. This calculated to a 32% increase from the last quarter of 2007 and 139% increase from the first quarter of the previous year of 2007. NOD or Notice of Default is issued when the borrower lags behind in consecutive mortgage payments. The numbers of NOD’s provide vital information about those house owners who own units they can ill afford. Nevada is one of the worst offenders as regards foreclosures for two years without a break. In the first three months of this year the foreclosure rate in Nevada is 1:52 – this being 7 times more than the national median.

Tim Chin of RealtyStore comments that the cause for Nevada having the highest number of foreclosures is largely due to a sudden increase in speculative investment in properties from 2004. At that time house prices sky rocketed by 47%. Now that the real estate market is balancing itself investors are in a soup with mounting inventory of foreclosed houses. The rapid decline in property prices is spelling doom for them.

In Nevada the worst pocket of foreclosure concentration is in Clark County that accounts for more than 90% of the foreclosures in the state. Clark County is home to the gaming capital of the world – Las Vegas or the Sin City. During the first quarter there were 15,876 defaults in this region. This was double the number of the first quarter 2007 – it being 6,651. The buyers gambled on house prices. The speculators made use of the sub-prime adjustable mortgage rates to stuff their pockets with loan money to invest in houses. They were sure that the price would continue to rise. This meant they could either sell it off later with high profits or refinance to fixed rate long-term mortgages. Unfortunately something went wrong and the houses behaved like the stock market and prices fell. The housing market in Nevada crumbled.

With more resets of mortgage rates in the offing, Nevada is gearing up for a spring and summer of mortgage payments increasing by 50%. Meanwhile property prices have been tumbling by 20% allowing for no scope either for resale or refinance. There seems to be no alternative to foreclosures.