Home foreclosures triple in Hawaii

Home foreclosure filings in Hawai'i more than tripled in August from a year earlier, according to a California real-estate research firm. There were 145 Hawai'i foreclosure filings last month, up from 42 in August 2006, said RealtyTrac of Irvine, Calif.

Foreclosures are rising nationwide because many consumers can't keep up with mortgage payments and face difficulty trying to refinance or sell their property as the housing market slows and prices drop in some areas. In many cases, defaults are rising because interest rates are resetting at dramatically higher rates for exotic loans heavily marketed to subprime borrowers over the past several years.

Nationally, foreclosure filings rose 115 percent to 243,947 — the highest number of filings in a single month since RealtyTrac began issuing its reports in January 2005. However, the company said the year-over-year change may have been inflated because of expanded data coverage for the state compared with a year ago.

While Hawai'i's housing market is tightening, it's not experiencing anywhere near the level of foreclosures seen in other states nor the level seen in Hawai'i in the mid-1990s. Hawai'i has the 10th-lowest foreclosure rate in the nation.

In the mid-1990s, Hawai'i foreclosures ranged between 4,000 and 5,000 a year, said Nick Ordway, professor of Financial Economics & Institutions at the University of Hawai'i and chair of Hawaii Real Estate Research & Education Center at UH. When told of the 145 Hawai'i foreclosures last month, Ordway said, "That's nothing." Hawai'i had one foreclosure filing last month for every 3,387 households. The national average was one per 510 households.

Hawai'i has maintained a relatively low foreclosure rate thanks to mostly stable home prices and a strong job market. Local lenders also say Hawai'i borrowers generally were more conservative, and didn't take out as many of the riskier loans compared with some Mainland markets. Still, RealtyTrac data show that Hawai'i foreclosure filings have risen in seven of the first eight months of this year compared with a year earlier.

NO HOUSING GLUT
The August increase in Hawai'i shows that the market "is obviously tightening and people do have to be prudent in taking loans," Ordway said. But he said the monthly increase does not signal a return to a '90s-style trend.

Unlike some Mainland states that are facing a housing glut, Hawai'i has not "gone overboard in the development" of single-family homes, he said. RealtyTrac said that given all the trouble with subprime lending, foreclosure filings may be headed higher. Subprime lending refers to higher-rate loans taken out by people with poor credit.

"The jump in foreclosure filings this month might be the beginning of the next wave of increased foreclosure activity," RealtyTrac CEO James Saccacio said in the report. Nevada, where there were 6,197 August foreclosure filings, had the highest filing rate at one per 165 households. The lowest rate was in Vermont, where 11 filings equated to one per 27,940 households.

RealtyTrac's data is one of the better, though imprecise, indicators of how many homeowners are facing foreclosure. The company counts a range of document filings in the foreclosure process, from default notices to auction notices and bank repossessions.

Because of the methodology, RealtyTrac's count can include more than one foreclosure filing on the same property. But the data also miss nonjudicial foreclosure notices that aren't recorded publicly, and situations in which homeowners in mortgage default are working with lenders in hopes of avoiding foreclosure action.

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*Article by Andrew Gomes, Honolulu Advertiser Staff Writer. You can reach Andrew at agomes@honoluluadvertiser.com

Hawaii real estate market update - September 2007

HONOLULU - While some real estate markets across the nation are experiencing instability, Oahu housing market continues on a steady path according to resale figures released today by the Honolulu Board of REALTORS® for the month of August.

During August, sales of 381 single-family homes and 495 condominiums were reported through the Board's MLS, an increase of 8.5 percent for single-family homes and a decrease of 14.7 percent for condominiums, compared to the same month last year. This brings total single-family home sales on Oahu to 2,622 for the first eight months of 2007, a decrease of 4.6 percent over the same time period one year ago. Total condominium sales through August were 3,930, a 14.5 percent decrease from last year. The year-to-date median prices paid for Oahu properties in the first eight months this year were $647,300 and $325,000, respectively, increases of 1.9 percent and 4.8 percent over the 2006 prices of $635,000 and $310,000. The total dollar sales volume generated in the housing market for the first eight months of the year was $3.580 billion, a decrease of 6.2 percent, or $236 million, compared to the $3.816 billion produced one year ago.

"The Oahu housing market has remained relatively stable," said Berton Hamamoto, president of the Honolulu Board of REALTORS®. "Single-family home sales during August were not only the highest in 2007, but also the best since March 2006 when there were 392 sales. Prices have been stable as well, with both single-family home and condominium pricing staying within a very narrow range."

"Mortgage rates dropped significantly over the last month, especially for the 1-year adjustable rate mortgage, and this historically leads to increased demand in the housing market," added Harvey Shapiro, research economist at the Board of REALTORS®. "Additionally, there are expectations of a Federal Reserve rate cut at their September 18 meeting, an event that could bolster demand for housing nationwide."