Hawaii Foreclosures Soar (real estate, rent, mortgages)

[mdand3boys]

An article in today's (5/13/10) Star Bulletin illustrates just how dire the economy and housing market is in Hawaii. It is generally mentioned in real estate circles that Hawaii tends to be 1=2 years behind California in real estate trends.

Hawaii foreclosures soar - Hawaii Business - Starbulletin.com

A small portion of the text of the article:

"....Oahu remained well below the national rate of foreclosures in April, but the Big Island and Maui markets took large hits......

....Hawaii's April foreclosures, which equated to one in every 348 households, added up to a higher rate than the national rate of foreclosures, which was one in every 387.
Oahu fared the best, with one in every 580 homes. But Maui and the Big Island saw a high rate, with one in every 187 and one in every 179 homes, respectively. There was one foreclosure in every 313 homes on Kauai...."

[thisbloominglife]

I hate to hear that. It must be one of the hardest things in the world to lose your home.

[hotzcatz]

Generally each story is different. Some were actually family homes where folks lived in them, some of them were just houses that were bought to be flipped and the owners got stuck when the music stopped. Over the past several years, I've known a lot of folks who have been foreclosed on. Some of them have gone back to the mainland to look for work, some of them have moved in with family, one of them is living in his truck and seems kinda happy there, surprisingly enough. Several of the houses have been "investments" where the folks just show up several weeks a year for vacation and it sits empty the rest of the year. Which seems wrong when there's homeless folks, but that's the way it goes. Generally, though, the houses were foreclosed on when the people lost their income for whatever reason.

[survivorqt]

its mostly investment homes, nothing like vegas/california/florida where homes are dirt cheap to begin with

[AlohaHuey]

That was the problem.

For a year before the meltdown, I kept hearing an astounding number: 40% of all mortgages were for 2nd homes.

There are some people who received loans they never should have gotten because their income and repayment means were lacking.

There are some people who fancied themselves real estate tycoons.

There are some people who, through no fault of their own, were caught up in the collateral damage and lost their homes through no fault of their own.

The fact loans were tendered to people whose sole qualification was a heartbeat should have been a major red flag. Just because people asked for the money, doesn't mean they should have ever gotten any.

[Boompa]

I assume there are homeless families living on the roadsides and under the bridges. I wish I could afford to pick up one.

[winkosmosis]

Are housing prices going to go down?

[dwedeking]

If the banks push out the foreclosure's they've been dragging their feet on, you'll see a drop in housing prices. Unfortunately, the rules are such that there is more incentive for a bank to hold the loan on their balance sheets and not foreclose, if they foreclose they have to take a loss and so many properties are underwater that many banks would then be insolvent.

[mdand3boys]

Originally Posted by dwedeking

If the banks push out the foreclosure's they've been dragging their feet on, you'll see a drop in housing prices. Unfortunately, the rules are such that there is more incentive for a bank to hold the loan on their balance sheets and not foreclose, if they foreclose they have to take a loss and so many properties are underwater that many banks would then be insolvent.

Actually, that is not true. The bailout program allows banks to sell the property at a loss and get a bailout on the difference between what they sell it for and what they had it on the books for. This is one of the reasons why foreclosures are so cheap. The bank does not care what they sell it for. They are still making money. This has been discussed on numerous financial forums.

[hotzcatz]

Originally Posted by Boompa

I assume there are homeless families living on the roadsides and under the bridges. I wish I could afford to pick up one.

Not really, most of them move in with friends and family. There are a lot of families who have grandma or grandpa move in with them or where the kids and grandkids move in with the parents/grandparents. It all depends on who has a better place and if all of them together can afford the rent or mortgage.