If you need assistance, please call 702-476-0060

Cautious Eye Being Kept on Las Vegas Home Market

Tuesday, August 4, 2020   /   by Ken Couture

Cautious Eye Being Kept on Las Vegas Home Market

The Southern Nevada housing market has been almost bulletproof so far during the COVID-19 pandemic, even reaching a new record for median home prices.


There is, however, concern over the growing number of homeowners in forbearance, or delinquent on their mortgage payments because of the prolonged economic shutdown.


According to one real estate source, only 3% of all mortgages were delinquent nationwide in January, before the pandemic.


But, as the economic shutdown continued into the summer, that number grew to nearly 8% as more Americans had difficulty keeping up with mortgage payments.


In Southern Nevada, according to Hightower Financial’s Mike PeQueen, “it’s all about the coronavirus shutting down travel.”


When travel into Las Vegas slowed to a trickle, it unleashed a flood of layoffs, furloughs, and loss of income.


“The pandemic affected the travel and tourism industry the most,” said PeQueen. “It’s our largest industry, so we have the highest unemployment rate in America, and so naturally it would follow that we would be one of the candidates to have the weakest housing market or the greatest number of people in mortgage delinquency.”


A national business network ranks Nevada only behind New Jersey and New York with the largest jump in delinquent mortgage payments. “In March, 3 1/2% of Southern Nevada mortgages were delinquent. By the next month, April, it went from 3 1/2% to 8 1/2%,” said PeQueen.


Forbearance rates are also worth watching, as homeowners with federally-backed loans renegotiate terms of their mortgages with lenders under the CARES Act.


Pam Junge, the Chief Adventure Officer of the Junge Group, says lenders have been much more willing in recent weeks to help people stay in their homes.


“When you call today, versus calling a couple of months ago,” Junge said, “you seem to get a very different story from the servicers. They are more apt to work with borrowers to assist them in getting payments modified, far greater today than they were two months ago,” she added.


The future of housing prices in the Las Vegas market will, in part, hinge on how quickly the travel and tourism industry can substantially increase, and get the Southern Nevada economy to stagger back to its feet.


“There’s a report out right now from CoreLogic, a real estate finance and research firm,” PeQueen said, ”that believes home prices in Southern Nevada, could fall by as much as 20% in the coming 12 months.” He adds, however, it’s a very different real estate world than a decade ago during the housing crisis. “We go into this crisis with a very strong housing market. There are very few subprime mortgages like there were 10 or 12 years ago during the first crisis, and people have a lot more equity in their homes than they did back then. Those are both positive things that could buffer whatever does happen here in southern Nevada.”


PeQueen says the federal government learned many lessons a decade ago, and is now taking decisive action to mitigate the damage. “Back in 2010, during the mortgage crisis, about 25% of Southern Nevada mortgages were in delinquency, so we are not at those levels yet, and it looks like with the different programs they’re going to be aggressive in trying to keep that from happening.”


PeQueen believes this time around, the outcome will depend on what happens in the coming months. “Whether it becomes a crisis is yet to be determined. It is a big problem, but it can be resolved if we can get the city back open later this year, and if we can get additional government assistance to keep people in their homes.”


For more info, visit us on:

www.CoutureRealtyLV.com

Follow us on:

FB: Ken Couture Realty Your Home Sold Guaranteed

IG: @kencouturerealtylv

Twitter: Ken Couture

Pinterest: Ken Couture

LinkedIn: Ken Couture Your Home Sold Guaranteed

Contact us at:

Ken@CoutureRealtyLV.com

702-476-0060

#KenCoutureRealty

#KenCouture

#KenCoutureYourHomeSoldGuaranteed

#LasVegas

#HomeForSale

#RealEstate