Overcoming economic survivor guilt

A year after the meltdowns of the banking and housing industries, an unseen by-product of the financial crisis has crept into the American society: the economic survivor guilt, the news organization USA Today reported.  

Simply put, the economic survivor guilt is the uneasy feeling of “capitalizing off of somebody else’s misfortune.”

This economic survivor guilt is specifically widespread in Las Vegas and surrounding Clark County.

Data aggregator RealtyTrac reported that in July, one in 13 homes in Las Vegas and surrounding Clark County was owned by banks. For the month of August, RealtyTrac reported that Nevada tops the U.S. foreclosure rate list, with one in every 62 housing units in Nevada receiving a foreclosure filing.

The prevalence of foreclosed homes resulted to the ample supply of houses for sale at bargain prices.
 
While a great number rejoice at the bargain home prices, there are those who carry the guilt burden for the persons who lost their homes.

A realtor told the news organization that whenever clients would express guilt feelings over the bargain prices of homes, he would remind his clients that it is not their fault and that they need to grab this opportunity for the welfare of their families. 

Psychologist Sylvia Lafair told the news organization that buying bargain-priced homes is like buying a stock. Guilt is often not attached when buying a stock as one does not meet or come in close contact in whatever form with the person who sells the bargain-priced stock. 

To overcome this economic survivor guilt, Lafair said, bargain-priced home buyers can balance this guilt with good deeds. When moving in to the newly bought home, for example, she said, the old things that are not anymore useful can be donated to the shelter of Salvation Army.

Foreclosures could be lessened by short sales

One way to reduce the number of foreclosures is by increasing the short sales, this according to the president of HBN Interactive Duane LeGate.

In Las Vegas where foreclosure is at its height, increase in short sales could lead to fewer foreclosures.

A short sale is a transaction whereby a lender permits a borrower to sell his home for less the amount that the borrower owes.

LeGate reported that many lender banks are putting off the foreclosure process when an acceptable short sale is in sight.
    
About 10 percent of the property transactions in Las Vegas are short sales, the Greater Las Vegas Association of Realtors reported. There are currently close to 4,800 properties in Greater Las Vegas that are listed as short sales.

FOX5 News reported that lender banks see short sale as an alternative to foreclosure. The news organization said that for every foreclosure, a lender bank spends about $50,000 in legal fees and maintenance alone.

The news organization added that although a short sale affects the credit status of the seller, it wouldn’t be as severe as a foreclosure.

In its latest report, data aggregator RealtyTrac reported that Nevada continuous to top the U.S. foreclosure rate list, with one in every 62 housing units in Nevada in August receiving a foreclosure filing–defined as default notice, scheduled auction and bank repossession.

The data aggregator added that a total of 17,902 properties in Nevada received foreclosure filings during the month of August, a rise by 53 percent from August of the previous year.

First-time home buyers hurries to avail tax credit

As the expiration of the $8,000 tax credit draws near, first-time home buyers are scrambling to qualify, this according to Las Vegas  Review-Journal.  

Dec. 1 of this year is the expiration of the Federal government’s $8,000 tax credit for first-time home buyers.

Although the expiry date is Dec. 1, to avail on this tax credit, transfer of title to the new homeowner must be recorded not later than Nov. 30.

It takes about 30-40 days, meanwhile, for a normal home sale to be completed, the news organization reported.    

The $8,000 tax credit can be availed by a home buyer  who has not owned a home in the past three years. This tax credit is authorized under the American Recovery and Reinvestment Act of 2009.

Las Vegas  Review-Journal reported that majority of the  first-time home buyers avail the Federal Housing Administration loans. These Federal Housing Administration loans comprised 28 percent of home sales in August, the news organization said.

The news organization added that of the total home sales in August, 23 percent were conventional loans, 5 percent were Veterans Affairs loans and  42 percent were cash transactions.
 
As the median price of  existing homes in Las Vegas is less than $135,000, an $8,000 tax credit is a big consideration for first-time home buyers, the news organization said.
And as the tax credit expiration date for first-time buyers draws nears, realtors associations have been lobbying to Congress for an extension period of the tax credit. Lobbyists are also pressing to increase the tax credit to $15,000 and expand the coverage of the tax credit, not only to first-time buyers, but also to all types of home buyers.

July home sales mostly foreclosure resales

About 70 percent of the homes resold in Las Vegas area for the month of July were homes that had been foreclosed in the last 12 months, this according to  
DataQuick.

DataQuick also reported that for the month of June, close to 70 percent of the homes resold in Las Vegas were also foreclosure resales.

DataQuick is a San Diego-based firm which tracks U.S. real estate trends  through public property records.

Compared to foreclosure resales of July last year, foreclosure resales in July  this year rise by 62.5 percent, DataQuick added.

The firm said the foreclosure resales reached its peak in April of this year, with 73.7 percent of  foreclosure resales in Las Vegas.

The real estate information service reported that Las Vegas home sales rose for 11 successive months as first-time buyers and investors, including those making “cash” deals, strategically sought out lower-cost, post-foreclosure properties. 

The firm added that the median sale price in July dipped by 4 percent from June.

DataQuick’s report on Las Vegas July home sales also include the following key findings:

For the month of July, a total of  5,311 homes were sold in Las Vegas-Paradise metro area (Clark County). This is the highest sales for any July since July of 2006 when home sales reached 6,530. 

Resales of 3,925 single-family homes were the highest for any July since July 2005 when 4,555 single-family homes were sold. 

For 13 successive months,  resale of condos have increased with sales in July being the highest since 2005.

DataQuick reported, “Sales of newly built homes remain extremely slow, largely because home builders can’t compete with discounted foreclosure resales.”

For the month of July, 430  new homes were sold, a decrease by 9.5 percent from June and a dip by 44.7 percent for the same period last year.

Nevada foreclosure activity decreases by 8%

Foreclosure activity in August in Nevada may have plunged a few percent, but Nevada still posted the nation’s highest number of foreclosure filing, this according to data aggregator RealtryTrac.

According to Las Vegas-based SalesTraq, there is a continuous supply of home repos on the Las Vegas real estate market.

RealtryTrac reported that one in every 62 housing units in Nevada received a foreclosure filing for the month of August. This translates to 17,902 Nevada properties receiving foreclosure filing during the month of August.

RealtryTrac added that Nevada foreclosure data as of the month of August is 8 percent less as compared to the July foreclosure data. The August foreclosure data on Nevada is 53 percent up compared to data in August 2008. 

RealtyTrac defines foreclosure filings as default notices, scheduled auctions and bank repossessions.
 
Next to Nevada in terms of foreclosure rate is Florida. One in every 140 housing units in Florida received a foreclosure filing. California posted the nation’s 3rd highest foreclosure rate. One in every 144 housing units in California received a foreclosure filing. For the same period, Arizona posted the nation’s 4th highest foreclosure rate. In August, one in every 150 housing units in Arizona received a foreclosure filing.

RealtyTrac reported that in the entire U.S., one in 357 housing units received a foreclosure filing in August. This translates to 358,471 U.S. properties receiving foreclosure filings for the month of August. This data is one percent less as compared to the data in August of last year.

In a statement, chief executive officer of RealtyTrac James J. Saccacio said, “The August report demonstrates that there is still an ample supply of properties filling the foreclosure pipeline even while the outflow of bank-owned REO properties onto the resale market is being more carefully regulated.”

Saccacio added, “After hitting a high for the year in July, REOs dropped 13 percent in August, but we also saw a record high number of properties either entering default or being scheduled for a public foreclosure auction for the first time.”

Buyers turn to new homes

Even as foreclosure sales persist to pull down the median home price in Las Vegas, there are progress signs that buyers are opting for new homes, this according to Home Builders Research.

The research group reported that the median resale price in August was $122,000, a decrease by 39 percent from the previous year. In August as well, sales of existing homes was only 3,833 compared to 4,371 in July.

Home Builders Research reported that while many buyers are still interested in foreclosed homes, others are interested in new homes. The reasons for this new interest in new homes, the research group said, is that good existing homes are hard to find and many of these good existing homes have already multiple offers. The other reason cited is that buyers find buying new homes less stressful compared to buying foreclosed homes.

The research group added that buyers are particularly interested in new homes that have $100-square foot floor plans.

The research group said that for the month of August in Las Vegas, 426 new homes were sold. In the previous month, 407 new homes were reported sold in Las Vegas.

A recent survey conducted by John Burns Real Estate Consulting showed that in California, the housing market is stabilizing. There were 269 home building executives who participated in the John Burns Real Estate Consulting survey. This California survey is quite important as California market mirrors that of the Nevada market.

Jody Kahn, vice president of Irvine, California-based John Burns Real Estate Consulting reported, “For the first time since we began our home builder executive survey 15 months ago, more California builders reported raising prices than those who reported prices were flat or down.”

According to Las Vegas-based SalesTraq, there is a continuous supply of home repos on the market. With this, SalesTraq added that home median price could hit $100,000.