Only in Las Vegas, where home construction and foreclosures surge simultaneously
Homebuilders in the country’s largest cities are getting ready for a boost of work, but only in Las Vegas are they ratcheting up plans as foreclosure activity rises, a new study shows.
Las Vegas is the only city in America with more than 1 million people that is seeing big jumps in both newly issued building permits and notices of default on existing homes, according to research firm RealtyTrac.
Local builders pulled 349 permits in the first quarter, up 57 percent from the same period last year, while “foreclosure starts” more than doubled to 3,410 last quarter. Default notices start the foreclosure process.
Eighteen other cities nationwide, including Henderson and North Las Vegas, had at least a 10 percent jump in new permits and foreclosure starts in the three months ending March 31.
Under RealtyTrac’s definition, Las Vegas has a population of 1.4 million, which apparently includes unincorporated areas.
Although home construction and foreclosure activity seem to be rising fast, they’re coming off historically low levels, said Dennis Smith, president of Las Vegas-based Home Builders Research.
The recession gutted the homebuilding industry, and Nevada’s “robosigning” law, which took effect in October 2011, drastically slowed the foreclosure process by requiring banks to provide more paperwork before seizing a house.
Banks, however, have learned how to pursue foreclosures under the new guidelines. At the same time, investor activity and the improving economy have boosted sales and prices of new and used homes.
By Smith’s count, new-home sales peaked at almost 39,000 in 2005 while newly issued permits reached about 33,000 in 2004.
Last year, roughly 5,500 new homes were sold in the region, up 42 percent from a record low in 2011. Local builders pulled around 5,900 permits last year, up 58 percent from 2011.
Things were so bad during the recession, it seems the market can’t get any worse.
“It’s only got one way to go,” Smith said.