Foreclosures in Washoe County soared 614 percent in 2007 from the previous year, according to a new report, and experts expect the slump in the housing market to persist through this year.
"It's going to get worse before it gets better," said Brian Kaise, an analyst with the Center for Regional Studies in Reno who helped compile the report based on data from the assessor's office.
The report said foreclosures have risen in all geographic areas of the Truckee Meadows, totaling 750 in 2007 from 105 in 2006. Additionally, 14 percent of the area's active homes for sale in December were bank-owned homes.
Add in homes already on the market, which are taking 20 percent longer to sell than in 2006, and "it's really not a good scenario," Kaiser said.
He sees no turnaround of the 6 percent drop in price last year for all housing countywide. And the glut in foreclosures could worsen as more adjustable-rate mortgages come due for big increases.
Tom Cargill, economist at the University of Nevada, Reno, agreed. "All bubbles burst, and the pressure came down," he said. "A lot of unwise decisions were made. Add in the slowdown in other economic indicators, and it puts even more pressure on. Prices will have to fall some more."
Ken Wiseman, owner/broker of Reno Rancho Realty, said his roster of homes added two more foreclosures Monday.
"I'm up to 22 right now. A year ago, I had zero," Wiseman said. "I have potentially another 50 homes not foreclosed on yet but are on the brink. And that's just me."
Wayne Capurro, Reno-Sparks Association of Realtors president, was a little more optimistic. He said recent interest-rate cuts and boosts in certain government loan amounts will help bring a turnaround in the existing-home market, possibly before 2008 is over.
He cited an association study that showed an easing in the drop in the median price of an existing home from 15 percent in 2006 to 10 percent last year.
"The word is out that most people were way too high-priced," he said. "The ones motivated to sell made the adjustments. The ones who'd been on the market for a long time were not reducing their prices. Now, they're doing that."
(Copyright 2008 by The Associated Press. All Rights Reserved.)