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» IN THE NEWS Nebraska rank: 46 90+ Day Delinquency Rate Foreclosure Rate September 2013 1.6% Unemployment Rate 0.9% 4.1% year ago 1.7% 1.1% 3.9% Investors Buoy Las Vegas Recovery but May Hinder Continued Growth year-over-year change -2.5% -24.0% 5.1% Top County KearNey CouNTy 90+ Day Delinquency Rate September 2013 0.4% Foreclosure Rate 2.3% year ago 1.3% 0.7% year-over-year change -68.4% 247.1% Top Core-Based Statistical area SCoTTSBluff, Ne 90+ Day Delinquency Rate September 2013 1.4% Foreclosure Rate 1.9% year ago 1.5% 1.3% year-over-year change -5.3% 46.1% note: The 90+ day delinquecy rate is the percentage of outstanding mortgage loans that are seriously delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the September 2013 foreclosure rate. All figures are rounded to the nearest decimal. The unemployment rate reflects preliminary September 2013 figures released by the Bureau of Labor Statistics. All other data courtesy of LPS Data & Analytics. Nevada rank: 8 90+ Day Delinquency Rate Foreclosure Rate September 2013 4.4% Unemployment Rate 3.9% 9.4% year ago 6.8% 5.5% 10.6% year-over-year change -35.5% -29.2% -11.3% Top County Nye CouNTy 90+ Day Delinquency Rate Foreclosure Rate September 2013 4.1% 6.3% year ago 6.0% 7.3% year-over-year change -31.8% -13.8% Top Core-Based Statistical Area PAhrumP, NV 90+ Day Delinquency Rate Foreclosure Rate September 2013 4.1% 6.3% year ago 6.0% 7.3% year-over-year change -31.8% -13.8% note: The 90+ day delinquecy rate is the percentage of outstanding mortgage loans that are seriously delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the September 2013 foreclosure rate. All figures are rounded to the nearest decimal. The unemployment rate reflects preliminary September 2013 figures released by the Bureau of Labor Statistics. All other data courtesy of LPS Data & Analytics. In terms of recovery in Las Vegas—one of the crisis' worst casualties—investors are leading the charge to recovery. The What Works Collaborative, an Urban Institute-supported partnership aimed at creating and implementing evidence-based housing and urban policy, released a case study focused on four ZIP codes in the Las Vegas metropolitan area. These markets represent low- to middle-level housing market subareas within the larger region based on price and contain roughly 12 percent of the area's population. The Las Vegas area has been one of the nation's foreclosure hot spots since the collapse of the housing bubble, the effects of which were particularly pronounced in Sin City. Prices declined from their 2006 peak by roughly 60 percent, home construction came to a standstill, foreclosure starts were more than double the national average, and the great majority of owners in the area found themselves underwater. Investors began entering the market in large numbers late in 2008 and early 2009; they have represented roughly half the market since then. A ballpark estimate, according to the case study, is that between 2009 and 2012 investors spent $25 billion acquiring singlefamily properties in the Las Vegas area. Investors showed a pervasive presence throughout the study area, representing slightly more than half of all single-family transactions and two-thirds of condominium purchases, typically purchasing properties slightly below the median price within each submarket area. Half of the investors recorded outof-state addresses because of widespread use of local agents and representatives, particularly on the part of overseas buyers. This significantly underrepresents the extent to which the Las Vegas area is drawing investors from out of the state and from other countries like China. And, it's individual investors leading the charge, not large institutional firms as expected. While there is evidence that "mega-investors" such as Blackstone and Colony Capital have entered the market, they still have only a small market share. VISIT US ONLINE @ DSNEWS.COM Investors have adapted their strategies to keep pace with shifting market conditions. According to the case study by the What Works Collaborative, the Las Vegas market has seen little predatory flipping or "milking" of properties. At the peak of the crisis, "market-edge" flippers were common. These are people who are able to sell the houses they buy for more than their cost by taking advantage of greater market knowledge or greater access to properties than other investors or homebuyers. As the market began to stabilize, and the disparity between REO and conventional transactions diminished, those investors largely left the market. Most of the properties coming on the market nowadays require little in the way of rehab, while property taxes are manageable at 1 percent of market value. There is compelling evidence that the dramatic increase in real estate transactions in the Las Vegas market from 2007 to 2009 was investor- rather than homebuyer-driven, an increase that enabled the market to absorb an exceptionally high volume of foreclosure inventory. That, in turn, meant the widespread abandonment that was taking place at the same time in many other foreclosure-ravaged parts of the country did not manifest in Las Vegas. The study proposes that had investors not been ready to step in, it is unlikely the market would have adjusted in the same fashion; the probability that an equivalent number of would-be owner-occupants would have emerged during those years is considered remote. Thus investors played a critical role in stabilizing the market and preventing widespread abandonment, although this assumption cannot be proven with certainty. What is becoming more evident is that it appears increasingly likely investors are crowding out prospective owner-occupants, the study contends. This crowding out is not so much because investors are willing to pay more, but that, from a transactional standpoint, selling to an investor offers the seller—particularly of an REO property—clear advantages. As one source of those conducting the study summarized, the investor will take the property "as is," will not look for a warranty, and as a cash buyer, will close quickly and require neither appraisal nor mortgage contingencies. However, there are drawbacks to such rigorous participation from the investor market. While investors are continuing to 85

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