Mises Wire

High Prices and Zombie Housing

“The inventory coming, but people are buying faster than it can get here,” GLVR President David Tina told Channel 8. “We have 5,000 available houses, but we sell 3,000 a month.” The Business Press backs this up, “By the end of September, GLVAR reported 4,969 single-family homes listed for sale without any sort of offer. That’s down 33.1 percent from one year ago. For condos and townhomes, the 680 properties listed without offers in September represented a 41.4 percent drop from one year ago.”

Dennis Smith of Home Builders Research points out, “There are still boatloads of homes underwater, or almost underwater, essentially keeping those owners from selling their home and buying another. However, there have been a lot of out of town buyers that have propped up the market and have kept the recovery moving forward.”

What Tina and Smith don’t mention Eli Segall does in the Las Vegas Review-Journal,”Some 2.17 percent of homes in the Las Vegas area, or a total of 14,334 properties, are vacant. That’s up from 2.15 percent, or 13,896 properties, in 2016, according to Attom [Data Solutions].”

That’s three months of inventory off the market.

The nationwide vacancy rate is 1.58% according to Attom, with most of these vacancies (75%) being non-owner occupied. Attom’s website post is entitled, “Vacant Property Rate Increases From a Year Ago in 54 Percent of U.S. Local Housing Markets in Q3 2017.”

According to the Attom report,

vacant “zombie” pre-foreclosure properties — which have started the foreclosure process but have not yet been repossessed by the foreclosing lender — decreased 22 percent from a year ago to 14,312 as of the end of Q3 2017, 67 percent below the peak of 44,030 in Q3 2013. The number of vacant bank-owned properties decreased 48 percent from a year ago to 24,026 as of the end of Q3 2017.

Most Zombie foreclosures are located in New York, New Jersey, Florida, Illinois and Ohio. Most vacant REOs are in New York, Chicago, Philadelphia, Baltimore, and Cleveland.

Nevada is among the leaders in numbers of seriously underwater homes.

The New York TimesThe Guardian and CNN’s Lisa Ling have all reported on the Las Vegas squatter problem. Ion Lovett wrote for the NYT last year,

Squatters have descended on every corner of the Las Vegas Valley, taking over empty houses in struggling working-class neighborhoods, in upscale planned communities like Summerlin, and everywhere in between. And they often bring a trail of crime with them.

“Things get out of hand pretty quickly when these people move in,” Jacquelyn Romero, 59, told the NYT. She has lived in the neighborhood for about 15 years. “We’re trying to do almost like a neighborhood watch, just to keep ourselves safe.”

Echoing that point, a vacant animal clinic in North Las Vegas was torched by squatters in the early hours of November 1st, reports the LVRJ.

This strange brew of limited sale inventory, rising prices and yet three months of vacant inventory being ransacked by squatters is not how markets work, unless manipulated by government.

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