Foreclosures running high


POSTED: Thursday, January 28, 2010

Although Honolulu finished 2009 with fewer foreclosures per household than the national average, the city's foreclosure activity increased at more than six times the national pace over the last 12 months and is expected to worsen this year.

Last year, 3,985 properties, or one in every 84 Honolulu households, was in foreclosure, according to a report released today by RealtyTrac, an online foreclosure market. The activity represented a 142 percent increase from 2008 and a 672 percent rise from 2007.

In comparison, there were 2.82 million foreclosure filings in the United States, or one per every 45 households. Nationally, foreclosures increased 21 percent from 2008 and 120 percent from 2007.

“;There was a pretty dramatic increase in foreclosure activity in Honolulu in 2009 and it increased at a much faster pace than it did in most other areas than the nation as a whole,”; said Daren Blomquist, RealtyTrac's marketing communications manager.

Honolulu moved up in the foreclosure rankings to No. 128 from No. 198 in 2008, he said.

On Oahu, Ewa Beach was the hardest-hit market followed by Waikiki, Kapolei, Waianae, Waipahu, Mililani, Kaneohe, Hawaii Kai, Kailua and Pearl City.

“;We had so many military buyers that gravitated to Ewa Beach in 2005 and 2006 that were on three- to five-year tours of duty,”; said David Kucic, a Realtor-associate with RE/MAX Honolulu. “;Now that they've been transferred, they can't afford to keep those houses and the rents aren't covering the payments.”;

As a result, certain neighborhoods such as Gentry's Tuscany/Montecito have many listings that are in short sale or foreclosure, Kucic said. Ewa Beach homes that sold for $430,000 to $500,000 during the previous boom are now selling for around $390,000, he said.

Job losses and lost hours also have contributed to the declines, said Stephany Sofos, a Honolulu-based realty consultant.

Unemployment and economic hardship have spurred a new wave of foreclosure activity that has spread into previously insulated cities, said James J. Saccacio, RealtyTrac's chief executive officer.

“;While it was expected that cities from states with the highest levels of foreclosure activity would top the charts, there is evidence that we're entering a new wave of foreclosures, driven more by unemployment and economic hardship than what we've seen over the past few years,”; Saccacio said.

Foreclosures in Honolulu will continue ramping up this year, Blomquist said.

“;Based on what we've seen in other cities that are further ahead, this was a phenomenon that took a couple of years to play out,”; he said. “;We saw big increases in these other areas in 2007 and they are still experiencing trouble now. Honolulu is playing catch-up now and not in a good way.”;

While California accounted for nine of the top 20 metro foreclosure rates, followed by Florida with eight, Nevada with two and Arizona with one, major metros in other states like Idaho, Utah, Arkansas, Oregon, Illinois, Minneapolis and Hawaii picked up the pace, he said. Cities favored by Hawaii expatriates and those that supply much of the state's visitor traffic also posted big increases, which will affect Hawaii's tourism and second-home/resort real estate markets.

Honolulu's foreclosure footprint remains low compared to cities like Las Vegas, which posted the nation's highest metro foreclosure rate. Hawaii expatriates flocked to Nevada during the last downturn; however, this time around the region is suffering even more than the islands. One in every eight housing units in Las Vegas received a filing during 2009, pushing the number of foreclosures to 94,862. Reno-Sparks, Nev., came in at No. 14, with 11,037 foreclosures, or one filing for every 16 housing units.

California, the source market for most of Hawaii's visitors and second-home buyers, continued to dominate the foreclosure rankings. Merced, Calif., posted the nation's third-highest foreclosure rate and RealtyTrac also listed the California cities of Stockton, Modesto, Riverside-San Bernardino, Bakersfield, Vallejo-Fairfield, Sacramento, Fresno and Salinas among the top 20 metros.





        California, Florida, Nevada and Arizona continued to dominate RealtyTrac's list of highest-ranked metros for foreclosures in 2009:

                FROM 2008
1. Las Vegas94,8621/8+41.1%
2. Cape Coral/Fort Myers, Fla.42,7341/8+4.1%
3. Merced, Calif.8,3891/10+1.2%
4. Riverside, San Bernardino/Ontario, Calif.126,3761/11+12.6%
5. Stockton, Calif.19,5401/12-7.5%
128. Honolulu3,9851/84+142.0%
— U.S.2,824,6741/45+21.2%



Source: RealtyTrac