A growing number of former homeowners just out of foreclosure are finding themselves getting back onto the property ladder within just a few years in the Las Vegas area, according to new reports. While these so-called boomerang buyers are still few in number, there are indications that their numbers are poised to grow and could have a huge impact on the city’s real estate market.
Realtors across the city are keen on the market re-entry of these resilient buyers. Dennis Smith, president and CEO Home Builders Research, confirmed that this type of buyer has aroused much interest recently. He said that these buyers are being driven by the fact that, in many cases, it has become cheaper to own a home than to rent a residence. Examining the numbers indicates that boomerang buyers could indeed be a substantial and largely untapped market, particularly for affordable priced homes like those on the short sales list.
In year 2000, the home-ownership rate within Las Vegas Valley was 64 percent, a figure which soared to a 68.8 percent high alongside the housing boom of 2006. As of this March, home ownership had dropped to just 48 percent. Although it is difficult to estimate how many homeowners became renters due to foreclosures, a housing analyst believes that mortgage defaults were largely responsible for the rental surge. During the downturn, some 130,000 households suffered a short sale or foreclosure. With the city maintaining its population level, it is logical to assume that many of those residents who defaulted remain, and a great majority of them would now be renting homes instead of owning.
One firm, Premier Mortgage Lending, was quick to see the benefit of boomerang home buyers. Last year, it came up with a special program called “Another Chance,” which it specifically launched for recently foreclosed home buyers. The program has already funded close to 200 loans. The owner of the company, Rick Piette, said it took some time for people to realize that there was available financing of this type, but now their phones are now busy with callers ringing non-stop about the program.