Isaac Brekken Photography, LTD
The median home price in hard-hit Las Vegas has fallen more than 8 percent over the past three years to $131,000.
It is – still – all about the economy, and in hard-hit swing states like Nevada and Florida that means intense, perhaps unprecedented, focus on the state of the housing market during this year’s presidential race.
Those two states, deemed strategically vital by pundits and election “tossups” by pollsters, also share top rungs on the “Housing Misery Index.” The ranking, calculated by the real estate website Trulia, shows where high foreclosure rates collide with steep price drops to form the heaviest homeowner heartaches. Nevada sits at No. 1 on the unfortunate list, Florida is No. 2, and both are at least two or three times more “miserable” than rest of the nation.
The enduring problems in the swing state housing markets have thrust residential real estate – typically a local economic concern and rarely a hot topic in national elections – into campaign ads and rally speeches like never before, said Jed Kolko, Trulia’s chief economist.
“Housing is more in focus in this election than in previous presidential elections,” Kolko said. “The housing market hasn’t been in this shape in any recent election. … The voters (in swing states) that will decide the election will want to hear about housing.”
As a November plum, Nevada doesn’t seem mathematically crucial. But underscoring the value of its six electoral votes, President Barack Obama is scheduled to campaign in Nevada again this week; it's his 12th visit to the state since taking office.
And he is taking the offensive over Nevada’s housing trauma. This week, the Obama campaign launched a new radio ad, lashing Republican challenger Mitt Romney and his running mate, Paul Ryan, for their past assertions that the housing economy should be allowed to naturally “bottom out” without action to help soften the blow.
The median sales price for existing homes in the Las Vegas market has fallen to about $130,700 from $142,900 in 2009, according to the National Association of Realtors. In Reno the median sales price has fallen to $165,300 from $193,800. Meanwhile, Nevada’s foreclosure rate was the sixth in the nation in July with one in every 415 housing units receiving a foreclosure filing, according to Bankrate.com. (The U.S. average was 1 in every 686 properties.)
“Housing will be a key to Nevada's election, I'd guess,” said Jon Ralston, a veteran political journalist in Las Vegas who offers political commentary via RalstonFlash.com. “It is the single biggest impediment to the recovery here. Unemployment is still at 12 percent, highest in country.”
The election edge Obama enjoyed in Nevada four years ago – he beat Republican John McCain there by 12 percentage points and 119,896 votes – has narrowed substantially, in part directly due to the huge number of foreclosures and job losses.
“The Democratic voter registration edge is smaller – they are building it back up – because so many people have fallen off the rolls because of losing their houses or leaving the state,” Ralston said.
In 2008, registered Nevada Democrats outnumbered Republicans in the state by almost 100,000. By April, the Democratic Party’s voter lead had dwindled to 36,000, the Las Vegas Sun reported.
Many would-be voters in Nevada, including some of Obama's 2008 backers, blame the White House for the lingering economic woes and the state's still-ragged housing situation, Ralston said.
But Obama still holds a lead of about 5 percentage points, averaging several recent polls, in part because Romney's views on housing don't sit well with many likely voters in the state.
In October, Romney told the editorial board of the Las Vegas Review-Journal that he didn’t favor foreclosure relief for homeowners with underwater mortgages – a tough sell with many consumers in that state.
“Don’t try and stop the foreclosure process,” Romney said. “Let it run its course and hit the bottom. Allow investors to buy homes, put renters in them, fix the homes up and let it turn around and come back up.”
In the same meeting, Romney said the Obama administration has “slow-walked” the foreclosure process, leaving an overhang of distressed properties on the market. And Romney referred to a first-time homebuyer tax credit as “throwing government money at something which is not market-oriented.”
When Obama spoke in Reno in May, he trumpeted a White House program that helps homeowners refinance their mortgages if they have loans backed by the Federal Housing Administration. He also called on Congress “to give every responsible homeowner the chance to save an average of $3,000 a year by refinancing their mortgage.”
“So the battle,” Ralston said, “will be between the terrible housing economy and Obama's attempts to mitigate it through various programs and Romney trying to exploit that despite his awkward comments."
Indeed, Republican voters tend to dislike like the notion of the government stepping into the housing market. A Trulia survey in late 2011 asked whether helping people keeping their homes is the right policy even if such an effort aids some undeserving homeowners: 61 percent of Democrats agreed vs. 38 percent of Republicans, the website reported.
“Republicans are much more concerned with the size of the deficit than Democrats are,” said Trulia’s Kolko. “And given that almost any housing policy the government might try would cost money, that makes it a partisan issue.”
Southern Nevada, where Obama will be campaigning Wednesday, has been particularly ravaged by shrinking housing prices. An estimated 68 to 75 percent of homes in the region are underwater, said JC Melvin, CEO and president of JC Melvin Seminars, a real estate license holder in Nevada for 29 years and often an expert witness called during real estate litigation.
Nevada voters tend to not blame either party for the housing crisis, Melvin said, but they are split - roughly 50-50 - on whether Obama or President George W. Bush is responsible for today's meek economy in Nevada and nationwide.
"What’s influencing their vote is the believability of the slant being put out by the various parties as to the reason why they lost their house," Melvin said. "Of course, the reason why they lost their house is simple: They bought it in a bubble, most of them. The economy stinks, so they lost their job. And as human beings, we’re always looking to answer the question: Why did this happen to me?"
More money and business news:
- As school bells ring, retailers listen for sleigh bells
- States that get the most federal money
- The argument for informational interviews
- Video: 'Diet' dessert labels may be fibbing
- Sign up for our Business newsletter