Foreclosures are down and home prices have increased in recent months, but that doesn't mean Nevada's housing market is on the road to recovery.
By several measures, Nevada remains the weakest housing market in the nation.
According to a LendingTree Healthiest Housing Index released in late March, Nevada has the highest loan-to-value ratio -- over 110 percent -- meaning that the average house has about 10 percent negative equity. The state also has the highest unemployment rate of 12.3 percent, compared with the national rate of 8.5 percent.
Cameron Findlay, chief economist of LendingTree, an online marketplace for home loans, said he's already seeing "regional disparity" in housing recovery around the country.
"Fundamentally, we have to define what recovery is for each state," Findlay said his office in Irvine, Calif. "For some, it's a lower unemployment rate. For others, it's home price stability or potentially a reduction in delinquency levels -- a precursor to foreclosure expectations."
The Healthiest Housing Index is based on debt-to-income ratio; unemployment rate; homeownership and occupancy rates; past-due mortgages; equity asset value; and loan-to-value ratio.
Certain elements of the Las Vegas housing market are looking better, some are looking worse and some are about the same, said David Brownell, broker with Keller Williams Realty. Nearly 4,200 homes were sold in March, and 1,872 of those homes were under $100,000, he noted.
"Say what you will, it's incredibly affordable," Brownell said. "Certainly the 54 percent of people who bought with cash think it's a good buy. Sales are happening, which is good for agents, but talk to sellers and they might not agree because they're stuck $300,000 under water and wondering what to do."
Negative home equity is extremely high in Nevada -- about 1.7 times the national average, economist Findlay said.
"The concern you have is, people are smart. They're evaluating if they're 50 percent underwater, how long will it take to earn back $100,000,'' Findlay said. "The concern is strategic default prevails and you have the domino effect of negative price implications."
Nearly 90 percent of Las Vegas homeowners with a mortgage have less than 30 percent equity, compared with a national average of 58 percent, he noted. Seventy-three percent have less than 10 percent equity, compared with 34 percent nationally.
CoreLogic reported that 13.3 percent of Nevadans were at least 90 days delinquent on their mortgage payment in January, down from 16.7 percent a year ago.
People are going into strategic default "left and right," Brownell said. It depends on where they're at in the market, he said.
"If I'm an owner who bought in 2007, I might want to move, but I can't because I'm trapped in the house. I'm a slave to the house. It's horrible," he said.
Nevada will be the last state to see a complete housing recovery, consultant John Restrepo of RGC Economics said.
"Of the states with the worst housing markets, we're the least diversified economy," Restrepo said. "That means our economy is going to grow slower than the other states."
But John Boyer, a Las Vegas real estate investor, said many reports about the local housing market are based on outdated information, and things can change a lot in two or three months. The market is not in decline, and everything in the lower price range has an offer on it, he said.
"I just lost out on another house in the $80,000 to $130,000 price range. That would be the seventh one in the last two weeks," he said. "There were literally dozens of others where I did not even start an offer because the property went contingent (under contract), but I would like to have had the property at the list price."
Contact reporter Hubble Smith at email@example.com or 702-383-0491.