Delinquencies have decreased within the Southern Nevada residential home over the past year. Delinquencies have also decreased within the Las Vegas commercial real estate market. An improving economy is the catalyst which means a healthier market overall.
This past December, the Las Vegas Valley had about 53 properties with loan payments 90 days or more late, which is a 10.7 percent delinquency rate. That is down from 14.9 percent in December 2013 and less than half from 2011. To give you a better perspective; there were 150 local commercial properties delinquent in 2012.
Delinquencies will continue to fall as the economy improves while banks and borrowers look for loan cures. The reason this is important is, if business owners have the ability to pay their mortgages, it’s a sign of economic stability and expansion.
“Those alternatives to default are available because the local market has stabilized,” said Bob Ybarra, an analyst with commercial brokerage CBRE Las Vegas. “You’re seeing a lot more absorption (leasing of space) in industrial, office and retail properties,” Ybarra said. “The overall fundamentals are better: You have a strong economy, businesses are rebounding, there’s more job creation, and there’s more wealth. We’re not breaking records, but some of these centers are starting to fill up with tenants again. And when they fill up, the landlords can service their debt.”
Though there are definite signs of improvement, the southern Nevada default rate still outpaced the national percentage, which was 5.75 percent in December. During the recession, the high was 24 percent which outpaced the national delinquency rate by far.
What this means is that there is still work to be done to improve Southern Nevada’s economy. Bringing in a variety of new businesses will give our city that improvement. Economic diversity will propel our community to unprecedented heights, which in turn, will elevate our standard of living.