By Mike Donahue
Moapa Valley Progress
The crushing recession and debilitating housing crisis that has crippled Las Vegas, the state and the nation is having an especially devastating impact in Moapa Valley.
Simply put, as is the case across the country, the problem for local residents is two-fold. Home values have dropped to the point where homeowners owe much more on their houses than they’re worth because of dwindling home values and many residents can no longer afford the home they’re living in because of the bleak economic picture in which they find themselves, which often includes a lost job.
Although exact figures are murky, some local realtors and other officials estimate that as many as 200 homes in the Moapa, Logandale and Overton area may be vacant or embroiled in the housing debacle which includes foreclosure fights with lending institutions. While there may be other considerations, vacancy is often a preliminary indicator that a homeowner has deserted a property or a lending institution has foreclosed.
“We’re certain at least 50 of the 114 homes and 119 parcels of land we’re actively trying to sell locally are properties that are in trouble, but the number is probably much higher,” according to Melody McKesson, of McKesson Realty. “We really don’t know for sure because some people have just walked away from their homes and the foreclosure process hasn’t caught up to the situation yet.”
Delmar Leatham, General Manager at the Overton Power District, said the district uses a simple formula to determine if a house is vacant.
“If a house is using less than 200 kilowatts hours a month, especially in the heat of the summer, then it’s generally believed that house is vacant,” Leatham said. “In August, we had 140 meters in Overton under 200 kilowatts; 48 in Logandale and 37 in Moapa.”
Leatham estimated that 10-12% of homes in the OPD coverage area (which includes Virgin Valley) are vacant. And new customer hookups in the OPD area have all but ceased.
“In a typical year we were seeing 30 or 40 new hookups in a month,” Leatham said. “Last month we had three.”
Dave Cook, a local real estate broker with Keller Williams Realty, said he believes the real estate situation in Moapa Valley is ominous.
“I would bet that at least 50 percent of the homeowners in the valley are upside down in their homes,” Cook said. “That’s terrible.”
He explained that being “upside down” or “under water” means a homeowner actually owes more on the house than it is currently worth – often much more. Some homes have lost more than half their value in recent years and the future doesn’t look much brighter.
“I don’t see anything turning around in the near future,” said Clea Whitney, a real estate agent with McKesson Realty. “It’s going to be some time before the market even starts to recover.”
Sylvia Torrey, a broker/sales person with Light Realty, agreed.
“I think it (the housing market) is going to turn around, but it will take a long, long time,” Torrey said. “It will never get back to what it was, however.”
Las Vegas leads the nation in foreclosures and other housing problems and three of four Las Vegas homeowners are under water, according to authorities. Predictions are that it will take years before the market will even start to recover – how many years is anyone’s guess.
“I think that out here we’re right with Las Vegas in that (upside down) regard,” Whitney said. “It looks pretty bad, but we don’t want to panic people.”
Unemployment is cited as a primary reason for the housing problem across the country and at more than 14 percent Nevada’s unemployment leads the nation.
Cook said that while the unemployment rate locally is at least commensurate with the rest of the state, if not higher, there are other obvious contributing factors to the local problem.
“The lake is gone,” Cook exclaimed. “When Lake Mead was full there was all kinds of boat traffic. People moved here to be near the lake. Now, there’s no water. Overton Beach is closed and Echo Bay is struggling. It’s easier for people to go to Lake Mead Marina or Las Vegas Marina to launch. They don’t move here, they don’t even drive through the valley.”
Cook also blamed the high cost of fuel as a contributor to Moapa Valley’s housing problem.
“Three dollar gas killed us,” he said. “People would buy (homes) out here knowing they could commute to work in Las Vegas. Now, they can’t afford it. The gas is just too expensive.”
Whatever the causes or reasons for the housing problems here, Moapa Valley homeowners who find themselves upside down and in trouble have the same options as everyone else in the county:
• They can continue making mortgage payments knowing they’ll end up paying far more than their home is worth;
• They can seek a loan modification from their lender which may result in recognized reduction in the value of their home translating into a smaller mortgage and payment;
• They can forfeit the deed in lieu of foreclosure, which essentially means the homeowner surrenders their deed to the lending institution;
• They can stop making payments knowing the lending institution will eventually foreclose on the home, or, similarly, they can just walk away, or
• They can attempt a short sale, which is selling the upside down home for less than it was worth when originally purchased.
“Naturally the first thing we recommend to homeowners in trouble is to try and work with their lender to get a loan modification,” Whitney said. “If somebody just can’t make their payments anymore, if they have some kind of hardship, we’ve found the banks sometimes are open to making adjustments.”
She cautions homeowners against merely stopping payments or simply walking away from the property.
“A homeowner may believe that just getting away from the home and the mortgage is the easiest thing, but the debt, a lender, can follow you for years,” she said. “When things start to get better for you financially, the lender can come after you.”
Whitney said too many Moapa Valley residents have lost their homes to foreclosures.
“There are many, many homes sitting in this valley that are bank owned,” she said. “It’s really sad.”
McKesson explained that for many homeowners, a short sale is the best avenue.
“If you short sale there’s a good chance you won’t be responsible for the difference between the mortgage and the sale price,” she said. “Lenders have been showing a lot of ‘debt forgiveness.’”
Time is the biggest obstacle to a short sale.
“We can close escrow on a repo in 45 days,” Whitney said. “Getting approval from the bank on a short sale might take six to eight months. Nevertheless, it’s still better than just walking away – ignoring the lender and the debt altogether.”
Janet Marshall, co-owner of Coldwell Bankers – Robison Realty, said short sales are driving the market.
“It’s kind of discouraging,” she said. “But if a buyer can have patience and wait for the lender to act, there are some good deals available.”
“Realtors are here to help homeowners in Moapa Valley,” McKesson said. “Whether it’s us or someone else, if somebody suddenly finds themselves in the middle of some kind of hardship — they can’t make their mortgage, they have to move for another job or whatever — they should contact us. Maybe we can help work things out.”
Last week the Obama administration instituted a policy to try and help homeowners who are under water on their homes.
The Federal Housing Administration is allowing lenders to give these borrowers refinanced loans backed by the government. The lenders will be required to forgive at least 10 percent of the original mortgage.
