"Deadbeat homeowners" causing false sense of appreciation in valley
Realtors advise caution on home pricesPhoto: Video by ktnv.com
Las Vegas, NV (KTNV) -- Home values in the Las Vegas Valley are going up. And while that might sound like good news, realtors say this is a false sense of appreciation spurred by people who haven't paid mortgage or rent for years.
They call them "deadbeat homeowners" and warn that the valley will never recover economically until they are made "honest" again.
A real estate agent that has been in the business for several years. Alan Herman, says that there are currently about seven buyers for every one seller in the Las Vegas market. He says that realtors are having a tough time selling home because there is a shortage of inventory.
Herman also says that people are living in homes that should be in foreclosure.
The Greater Las Vegas Association of Realtors say that there is about 50,000 homes in some sort of default.
In 2011, the Nevada state legislature passed AB284 which was meant to protect property owners from fraudulent foreclosures.
That has forced banks to have all the necessary paperwork before kicking a resident out.
Kolleen Kelley of GLVAR says that has created a "stagnation of the inventory."
The Mortgage Forgiveness Debt Relief Act has opened up more than $20 billion for troubled homeowners and has spurred short sales.
But, that is set to expire at the end of the year.
Bill Uffelman of the Nevada Bankers Association says. "If your lender is calling, you should be talking to them. You don't want to be ducking your lender."
The shortage of home has also increased home prices to levels not seen since 2004.
In October, home values were up 16.8 percent from the previous year. Realtors say a healthy appreciation is usually around 4 to 4 percent a year.
Realtors and banking experts are expecting banks to begin filing notices of default again in 2013 as they learn to work around these state and federal laws.
They anticipate home values to come down to an average level as long as the banks don't flood the market again with empty homes.