Thursday, February 3, 2011

2010 foreclosure report reveals good and bad news

As far as the Myrtle Beach area goes, it looks like we are following the trend for the most part. Foreclosures continue, which drives down prices, yet activity is on the rise.

MYRTLE BEACH, SC (WMBF) - A report released by RealtyTrac on Thursday sent mixed messages about America's foreclosure activity in 2010. The company, which is considered the leading online marketplace for foreclosure properties, released its 2010 Year-End Metropolitan Foreclosure Market Report.  It showed foreclosures increased from 2009 to 2010 in most of America's largest real estate markets. However, in the metro areas with the 10 highest foreclosure rates, foreclosures decreased.
Real estate researcher Tom Maeser in Myrtle Beach says having a high rate of foreclosure is a bad thing for an area.
"It has a terrible impact on values of property, and that's where we're being hurt the most," Maeser said. When property values drop, it can eventually have a trickle-down effect that can cause cut backs in government services.
Myrtle Beach area foreclosure specialist Blake Sloan pointed out those areas with high but decreasing foreclosure rates include several areas where investment and second homes were the first properties to go into foreclosure. So it makes sense that those areas would be the first places to see improvement he said.
"Overall it's good news seeing those numbers, at least in those top ten areas before, being down year to year, because it shows, the market correction does work - that people are still going to buy things once it gets to [a price that matches] buyer demand," Sloan said. "That's why we're able to see that it corrected itself in those areas, it flushed it out, and now you're seeing more of a neutral zone where things are finally getting there [to a settling point]."
Horry County has been hit hard by foreclosures, but Sloan said early numbers show foreclosures have slowed in Horry County too. After jumping nearly 280% from 2008 to 2009, foreclosure activity stayed about the same from 2009 to 2010, according to preliminary reports.
"The market has to correct itself, and we're already seeing that as far as the oceanfront homes, condos, investment property," Sloan said.
However, Sloan said the report is a little skewed because many banks stopped doing foreclosures at the end of the year. That is something Maeser noted as well.
"Banks put a moratorium on foreclosures, so they stopped that process for a while," Maeser said. "They're also holding back many so they don't flood the market."
Maeser said that means many more homes could now be just a step away from foreclosure. He said that could mean a high percentage of foreclosures will be on the market for months to come.
"Foreclosures as a part of our life are going to be around probably, could be up to two more years," Maeser said.
Jobs are also playing a major role in the foreclosure market. Maeser said unemployment rates will need to drop as well before foreclosure rates follow.

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