Chaos In Vegas As Condo Gambles Turn Sour

What’s happening in Las Vegas sounds just like what’s happening in California, Florida, Arizona, New York, and all the other parts of the country where real estate prices got much higher than fundamentals. Hubble Smith of the Las Vegas Review-Journal has the story on the Vegas condo market:

First, condo investors can’t get the financing that was available a few years ago:

“I would love to close (escrow) and stay in the project,” Cowan said. “I’m in real estate and with a stated income, you can’t get a loan. Maybe if you put 50 percent down. Call it whatever, reality is what it is.”

Cowan isn’t the only condo buyer in that sinking boat.

Tighter credit requirements squeezed some buyers out of financing. They could have qualified for a mortgage when they bought a unit in the preconstruction stage, but not now.

Prices are down 50% in many cases and in “free-fall with no end in sight.” Some condo projects are bankrupt.

“Owners wanting out are having a horrific time unloading them,” Hawks said. “One reason is many have dropped in price, so much that they owe more than it’s worth. Units that were once $1.4 million are now $700,000 and units that were $600,000 to $900,000 are now $350,000 to $600,000 and are continuing to free-fall with no end in sight.”

Buyers at Mira Villa condos, a project by HDB that filed for Chapter 11 bankruptcy in January, are worried they may never see their earnest money again.

If you think real estate prices are going to recover anytime soon, read the whole article and see if that changes your mind.

Chula Vista’s full of cut rate foreclosed McMansions

Median income in Chula Vista’s 91914 zip code is above the national average. The problem, however, is that it’s not far enough above the average to support the insanely high prices of the 2003-2007 bubble years. Banks that loaned money for purchase of these homes during this time have only just began reporting what will turn out to be many millions of losses from these loans. Of course many of these loans ended up in mortgage-backed securities. Investors in these instruments also will lose millions, just from this single, lightly populated suburban zip code. Here is a small sample of the losses. All of these are either foreclosures or short sales:

2936 Ranch Gate Road

sold 6/06 $1.763M
resold by bank after foreclosure for $919K
-$844,032 (-48%) drop from 2006

.

897 Chesapeake Pl

sold 4/05 $1192K
for sale @ $678K
-$495,000 (-43%) drop from 2005

329 Plaza Paraiso
sold 5/05 $760K
For sale @ $475K
-$285,000 (-37%) drop from 2005

324 Plaza Paraiso
sold 5/07 $1000K
For sale @ $500K
-$500,000 (-50%) drop from 2007

982 Adirondack Pl
sold 2/07 $1.25M
For sale @ $639K
-$611,000 (-49%) drop from 2007

2912 Winding Fence Way

sold 4/06 $1.155M

For sale @ $750K

-$405,000 (-35%) drop from 2006

.

1042 White Adler Place

sold 5/05 $1.167M
for sale @ $689K
-$478,465 (-41%) drop from 2005

.

1015 Silver Oak Place

sold 7/05 $1.075M
For sale @ $649K
-$426,000 (-40%) drop from 2005

.

2916 Winding Fence Way

sold 3/06 $1.177M
For sale @ $699K
-$478,140 (-41%) drop from 2006

.

1019 Mountain Ash Ave

sold 5/06 $1.24M
For sale @ $850K
-$390,250 (-31%) drop from 2006

.

1046 White Adler Ave

sold 5/05 $1.058M
for sale @ $599K
-$459,450 (-43%) drop from 2005

.

2241 Lago Madero

sold 10/03 $334K
resold by bank after foreclosure for $280K
-$54,000 (-16%) drop from October 2003

.

957 Wind Cave Place

sold 6/03 $500K
resold by bank after foreclosure for $430K
-$70,000 (-14%) drop from June 2003

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