The End of Las Vegas?

Home prices may be stabilizing in some areas in the nation, but the damage has already been done in the housing markets that saw the biggest boom and in turn the biggest bust.

Home buying in these markets reached a frenzied pace during the middle of this decade, and that means that a good portion of buyers purchased homes at the top of the market. No surprise that they have now sunk deepest underwater on their mortgages.

Cities_Underwater_Mortgages_promo.jpg

A new survey from Zillow.com shows that even in those markets where investor competition has returned and prices on the low end are beginning to stabilize, homeowners still owe far more on their mortgages than their homes are currently worth. (Get educated before you make a change: 6 Questions to Ask Before You Refinance)

Las Vegas leads the way with 81.8 percent of borrowers underwater on their loans in the third quarter of this year, down barely one percent from the second quarter but still up 10 percent from the first quarter.

The bulk of underwater borrowers are in California, Florida, Arizona and Nevada. While home prices nationwide were down 8.5 percent in September from a year ago, prices in these states are still way down -- 34 percent in Las Vegas, 26 percent in Orlando, 23 percent in Phoenix and 11 percent in Los Angeles (National Association of Realtors). Again, that's from a year ago, but many of these cities have seen over 50 percent price declines from the peak of the market.

more...

http://realestate.yahoo.com/promo/us-cities-with-the-most-underwater-mortgages

You have to look at the bigger picture. The rally in stocks since march has boosted business and consumer sentiment. It's a self-fulfilling story, where positivity breeds positivity and leads to exuberant runs in stocks and commodities on 'expectation' of a recovery.

The property story is the same all over the globe. The stimulus packages have assisted the property situation and the talk of recovery on the news has led to investors moving back in. This is fine if the recovery holds. If it doesn't then the falls will continue and the situation will get worse.

Dubai property is down 50% from the peak so i'm sure there were a few investors buying the 'bottom' there. Now that the state is struggling with debt, there will likely be a rush of investment capital heading for the exit door and prices will fall further.

Too many thought that the credit mess could be fixed in six months but there's too much headwind out there with falling trade, commercial property and debt.

I wouldn't call it the end of Las Vegas but it's certainly the end of the honeymoon for property investors globally.

The property market is a pyramid scheme, you gotta get in early to get a taste.

SAINT said:

You have to look at the bigger picture. The rally in stocks since march has boosted business and consumer sentiment. It's a self-fulfilling story, where positivity breeds positivity and leads to exuberant runs in stocks and commodities on 'expectation' of a recovery.

The property story is the same all over the globe. The stimulus packages have assisted the property situation and the talk of recovery on the news has led to investors moving back in. This is fine if the recovery holds. If it doesn't then the falls will continue and the situation will get worse.

Dubai property is down 50% from the peak so i'm sure there were a few investors buying the 'bottom' there. Now that the state is struggling with debt, there will likely be a rush of investment capital heading for the exit door and prices will fall further.

Too many thought that the credit mess could be fixed in six months but there's too much headwind out there with falling trade, commercial property and debt.

I wouldn't call it the end of Las Vegas but it's certainly the end of the honeymoon for property investors globally.

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...good1

Even those who normally do not will be effected.

jaspertrademaster said:

Even those who normally do not will be effected.

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Seems likes the law of supply and demand does not exclude hookers.