Why are ther so many Foreclosures on the Big Island? Especially in Hilo and Puna Areas
Predatory Lending: Loans approved for borrowers who do not have the necessary financial resources to meet the obligations of the debt; along with, the lenders’ failure to provide sufficient information regarding future adjustments of the interest rates (i.e. Adjustable Rate Mortgage – ARM). Do not confuse predatory lending with aggressive lending.
Declining Prices: 25% of all homes are now worth less than the loan amount and are referred to as being “upside down.” In this scenario, if homeowners are having difficulty making payments, many choose to “walk away” from the property and the mortgage allowing foreclosure to take place. Unfortunately, foreclosed properties are typically sold at “below market” prices which further contributes pricing reductions.
Unemployment: Because the real estate market is directly tied to the job market, the rise in unemployment has had an adverse effect on the market. New jobs are needed to create the need for new homes. It has been estimated that it will take 1.2 new jobs to create the need for one more house.
Increased Debt: The amount of credit card and installment loan debt in this country has been continually increasing for a number of years, as have the interest rates on those loan instruments.
Increase in Home Inventory: The National Association of REALTORS® estimates that six-months of inventory creates a neutral market, meaning that there is an equal number of buyers and sellers which causes the price of real estate to remain static. In this case we have moe than a 6 month supply, so the prices have dropped.
Looking to get a good deal on a Foreclosure in Hawaii?
go to http://www.hawaiiforeclosure.info/
Howard Dinits RB
Dinits Realty
808-874-0600
Dinits Realty
808-874-0600