Oahu Home Sales

Increase in Hawaii Foreclosures Significant But Not Severe

Content for this blog entry was taken from the article in the Honolulu Advertiser written by Advertiser Staff Writer Andrew Gomes.

To view the contents on www.honoluluadvertiser.com, go to:
http://www.honoluluadvertiser.com/apps/pbcs.dll/article?AID=/200805140100/BUSINESS04/805140373

Here are some key points from the article:

Hawai’i home foreclosure filings last month rose above 200 for the first time in recent years, according to a count by RealtyTrac, presenting another weakening – yet still not alarming – sign for the local real estate market.

Still, foreclosures are relatively low for the state historically, and haven’t dragged home prices down dramatically as they have in some markets on the Mainland.

During Hawai’i’s mid-1990s housing slump, there were 300 to 400 foreclosures per month as measured by foreclosure lawsuits filed.

Today, most foreclosure cases in Hawai’i occur outside court, with some estimates of nonjudicial foreclosures as high as 90 percent of the total.
While judicial foreclosures can be easily tracked through court documents, nonjudicial foreclosures are more difficult to quantify because some of the information, such as default notices, typically aren’t public.

Though job losses, divorce and health problems are traditional causes of financial difficulty that lead to foreclosure, many consumers are now losing their homes after mortgage interest rates reset at dramatically higher rates on exotic loans that were heavily marketed to subprime borrowers over the past several years.

In Hawai’i, local lenders say borrowers generally were more conservative and didn’t take out as many of the riskier loans as in some Mainland markets.
Also helping the local housing market avoid a foreclosure deluge have been mostly stable home prices, relatively low unemployment, rising personal income and an economy that is still growing, albeit only slightly.
Constrained land supply also prevented developers from over-saturating the market with unsold new homes.

In many Mainland markets, plummeting home values, a glut of inventory and weak buyer demand have prevented troubled owners from refinancing or selling their property. In some extreme cases, foreclosure waves have eroded property tax bases and placed municipal budgets in peril.

Nationally, the foreclosure rate in April was four times higher than Hawai’i’s at one filing per 519 households, or a total of 243,353 that represented a 65 percent increase over April 2007.

This entry was posted on Monday, May 19th, 2008 at 12:21 am and is filed under For Buyers, For Sellers, Market Watch, Updates. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.