The Worst of the Foreclosure Crisis is not yet Over
In Hawaii the worst of the foreclosure crisis is not yet over. Filings increased by nearly 427% in June 2009 in comparison to 2008. In one year this is the second worst rate. Over 87% of the total foreclosure postings are in the initial stages of the process.
The housing market in Hawaii saw the total number of foreclosure filings spike to 706. It is only just starting to feel the pinch of the crisis that has battered the mainland markets said Darn Blomquist of RealtyTrac. In June of the total number of foreclosure postings (615) are yet to be repossessed by the lenders. Blomquist said, “Hawaii’s main increases are in default notices and auction notices, the first and second stages of foreclosure. That tells us that the full impact of foreclosures hasn’t hit the market.”
The foreclosures in Hawaii are not concentrated but spread out across diverse localities having different income zones. Some are harder hit than others said Gerogia Roerson of Coldwell Banker Pacific Properties. Condotels comprising of condo properties being part of a rental pool of hotels have been massacred by the fall in tourist numbers as well as the credit freeze. Roberson explained, “Nobody on the island will lend on a condotel, and there just aren’t that many cash buyers for them in this market. I’ve had several listings in the Ilikai and there are a few more coming up.”
The median selling price for houses in Oahu has fallen dramatically from what it was one year ago. Most of the drop is related to foreclosures said John Riggins of John Riggins Real Estate. He has estimated that nearly three fourths of his business in now concerned with properties that are in some stage of foreclosure.
Blomquist said, “You could already be experiencing price declines in neighborhoods, but you won’t feel the full brunt until the lenders take back their properties and put them on the market.” These states have kept up its lead in foreclosure activity in USA. Blomquist commented, “At a certain tipping point, REOs will pull down home prices more, and that creates a vicious cycle. Blomquist said. "Since foreclosures in Hawaii only began to increase in July of 2008, it’s safe to say that you are still early in a cycle that will last years rather than months.”
For this same reason, Riggins who has been dealing with property in Hawaii apprehends that foreclosures will be touching record high numbers in this cycle.