Realty investor blues


POSTED: Saturday, June 13, 2009

Hawaii, which leapfrogged to No. 15 on a state ranking of foreclosure rates in May, has a larger percentage of second-home owners or investors in foreclosure than the nation, according to Irvine, Calif.-based RealtyTrac.

As many as 42 percent of foreclosures through May in Hawaii were at non-owner-occupied properties, compared with 40 percent for the nation as a whole, said Daren Blomquist, marketing communications manager for RealtyTrac, an online marketplace that monitors nationwide foreclosure activity.

“;Hawaii is higher than the national average,”; Blomquist said.

Maui, where 50 percent of foreclosures were at non-owner-occupied addresses, had the largest share, followed by Kauai with 48 percent, the Big Island at 45 percent and Oahu at 35 percent, he said.

“;There are definitely some areas where we see a higher percentage of foreclosures at non-owner-occupied properties,”; Blomquist said.

Hawaii, which tends to lag the mainland, is starting to feel the trickle-down impact from economic problems in other markets, he said.

“;It makes sense that the first property an owner would default on would be their second home, as opposed to one that they live in,”; Blomquist said.

Kailua-Kona, where there are a lot of second homes and investment properties, posted 61 foreclosures in May, topping the list of state neighborhoods with filings.

Ewa Beach, Kihei, Kahului, Waianae, Lahaina, Kapaa, Pahoa, Wailuku, Kapolei, Waikoloa, Waipahu, Hilo and Lihue rounded out the list.

Hawaii residents suffer from foreclosures regardless of whether they displace local owners or tenants, said Nani Medeiros, executive director of Housing Hawaii, a nonprofit focused on affordable housing.

“;We need to understand that this is not simply an economic issue about whether or not someone can make their payment. It's a problem that touches all of us,”; Medeiros said.

Earlier this year, Housing Hawaii forecast that the state would see 5,600 foreclosures this year and that 18,600 homes would be lost over the next four years.

“;It's even worse than I thought it would be,”; Medeiros said. “;I wasn't expecting to see the huge growth that we saw in March, April and May.”;

RealtyTrac reported that the number of foreclosures in Hawaii had grown to 816, the highest number since 2005, in May.

There were 684 foreclosures in Hawaii in April and 724 in March, which represented the biggest year-over-year increase since 2005, RealtyTrac said.