Las Vegas has come a long way since the depths of the Great Recession. New jobs have been created, the gaming industry has rebounded, and companies have been moving to the region.
We’ve been enjoying a modest recovery. But there are still some dark clouds over head. Especially when it comes to the negative equity rate in the Las Vegas housing market, according to a report by Seattle-based real estate data tracker Zillow.
Negative equity at the end of 2014 in Las Vegas was 26.4 percent. Negative equity refers to when a homeowner owes more on a mortgage than the value of the home if sold on the market, otherwise known as being 'underwater.'
"It's not the number one topic anymore, but it still remains an issue, because while home values have risen dramatically, home value appreciation is actually slowing down," Svenja Gudell, senior director of economic research with Zillow, told KNPR's State of Nevada on Monday.
In the Las Vegas area, Zillow said negative equity has been declining since hitting a peak of 71 percent in the second quarter of 2012. Although the negative equity rate has declined significantly, Gudell said double digit rates "well might be" the normal for sometime in Las Vegas.
"Normally, you would see negative equity rates around 4 percent to 5 percent in a healthy market," Gudell said. "Nationally, we are at 17 percent. I see us sticking around these double digit numbers for quite sometime, and that will certainly have an impact on the marketplace."
Zillow said 88,037 Las Vegas-area homeowners were underwater at the close of 2014, with a combined negative equity of $7.56 billion. Zillow projected that the area’s percentage of underwater homeowners will fall to 23.1 percent by this year’s fourth quarter.
Svenja Gudell, senior director of economic research, Zillow