Increase in foreclosures tied to new Nevada law

AFTER sharply pulling back last year, banks are ramping up foreclosure activity in Las Vegas again. Lenders issued an average of about 500 default notices per month in the fourth quarter last year, up from just 32 a month in the third quarter and 380 per month in the first half of 2017, according to figures from housing tracker Attom Data Solutions.

Overall in Las Vegas, the number of homes hit with foreclosure-related filings plunged 40 percent last year.

But before you start cheering that Las Vegas’ housing market has FINALLY recovered from the brutal recession that all but toppled the local economy last decade, we should note, as we have before in this column, that last year’s drop came after a new foreclosure law kicked in.

The law, Senate Bill 490, took effect June 12 — the same day Gov. Brian Sandoval signed it — and made permanent the state’s Foreclosure Mediation Program. It also shifted the program’s oversight to Home Means Nevada, a state-launched nonprofit that had effectively shut down early last year.

Lenders slammed the brakes on repo activity while waiting for the program’s new administration to take shape, industry pros have said.

Home Means Nevada is now fully operational and started issuing certificates Nov. 1 that let lenders proceed with foreclosures, board president Shannon Chambers said.

Foreclosures were sliding in Las Vegas before the law took effect. But the drop last year “wouldn’t have been quite as dramatic without the

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season has led to investments in new convention space, rooms and related properties, Restrepo said.

He expects $1.3 billion of hotel construction investments in 2018 and $12.4 billion between 2019 and 2023. Restrepo said he predicts investments made in 2018 will go toward 572,000 square feet of new convention space, 1,194 new rooms and four new properties.

He predicted construction from 2019 to 2023 to produce 1.2 million square feet of new convention space, 7,260 new rooms and nine new properties.

Last year $429 million was invested in three new properties and 151,199 square feet of new convention space, he said.

For local industrial property, the vacancy rate shrank to 5.5 percent in the third quarter of 2017, compared to a 10-year high of about 15 percent between the third quarters of 2010 and 2013, he said.

Real estate: The bad

The same could not be said for the local vacancy rates for retail and speculative office space.

Restrepo’s data showed the retail vacancy rate at 10.4 percent in the third quarter of 2017 and speculative office vacancy at 19.5 percent in the same period. Both rates roughly doubled from 2007’s third quarter.

“It’s becoming a big issue for us,” he said.

On the residential side, Restrepo worries about a growing gap between average new home prices and average existing home prices, as well as the volume of new home sales compared with existing homes.

The price gap has widened in the past decade.

In November 2017, the median price for a new home was $343,588, while the median for an existing home was $225,900 — a difference of $117,688. In November 2007, the median price for a new home was about $325,000, versus $275,000 for an existing home — a difference of about $50,000.

December 2007 saw sales of about 2,000 existing homes and about 1,500 new homes. Restrepo’s data for last month showed 4,163 existing home sales, compared to 767 new home sales.

Employment: The good

Multiple speakers said they hope President Donald Trump’s tax bill leads to higher wages.

Restrepo said job increases in

sectors like education and business services show the local economy is diversifying to include more than gaming.

Employment: The bad

Restrepo said he believes wage stagnation has played a part in local reluctance to buy new homes and the popularity of renting apartments.

The Las Vegas area apartment vacancy rate for the third quarter of 2017 was 7.5 percent, compared to 10.5 percent around 2010.

Wages still lag nationwide, Restrepo said. Inflation-adjusted average weekly earnings in the Las Vegas area were at $669 for November 2017, versus a nine-year high of over $700 in November 2008.

In November 2017, the average employee’s work week was 33.9 hours for the Las Vegas Valley, 34.1 hours for Nevada and 34.4 hours for the United States. In November 2009, the Las Vegas and Nevada averages were around 36 hours, and the national average was around 34 hours.

Restrepo says the stagnation is linked to automation, the continued use of recession-sized staffs and a preference to work with contractors, rather than full-time workers.

Though the tax bill and optimism about regulation reductions during the Trump administration have sent the stock market up, employees have not yet seen benefits, he said.

Restrepo believes 65 percent of Las Vegas jobs will be replaced with robots by 2035. The least protected jobs include telemarketers, cashiers, administrative staffers and servers. The most protected jobs include doctors, social workers and surgeons.

The Las Vegas Review-journal is a Gold sponsor of Preview Las Vegas.

Contact Wade Tyler Millward at wmillward@reviewjournal. com or 702-383-4602. Follow @ wademillward on Twitter.