Home Buying in 29401>Question Details

Hoosier, Home Buyer in 29401

Charleston, SC - More foreclosures coming?

Asked by Hoosier, 29401 Sat Jul 4, 2009

LATimes is reporting this morning that we are on the cusp of a new wave of foreclosures. Will that wave hit Charleston? Is the historical district vulnerable?


Help the community by answering this question:


Yes, and a lot more foreclosures will hit this market in the next 12-18 months. The wave is making its way here.

I see a lot of misinformation posted on this site from those who have their own personal agenda. One poster says it's not a time for paralysis - it is a time for concern and performing your due diligence.

Doing nothing is a great option and that's what those of us who understand this marketplace are advocating.

Employment (NOT Housing) will lead the recovery - get employement stabilized and the housing situation will improve. Interest rates are somewhat irrelevant in a declining RE marketplace. Every one % increase in interest rates translates into a 10% decline in housing prices.'

The one comment about a % increase in Prime loans being a good thing is totally misleading as Prime and Jumbo loans are the next segment to take a hit, with a much greater impact on housing prices and stability than what happened in the sub prime segment. Combine that with the Option ARMs coming due and this implosion continues until 2012.

We are not even close to seeing a bottom in prices in homes 'priced' at $500K and above. They have another 30-40% decline before the proverbial bottom is reached.

I'd rather pay more in an interest rate than lose equity $$$$ as the market continues to tank.

Right now, we are seeing deflation in housing in the Charleston marketplace especially in land, materials, labor. You can build today for much less than what some of these higher end homes are listed at.

There is a huge shadow inventory of homes that haven't even hit the marketplace yet and when they do, prices will fall further.

Wait, and wait some more and you will have your choice of homes at the price you are willing to pay.
2 votes Thank Flag Link Sun Jul 12, 2009
This is a rare opportunity to be a buyer. Never have interest rates dipped this low in 50 years. Housing will lead the way to recovery and the Charleston area will lead the nation more quickly than many other areas. This is a time for good research and analysis - but not a time for paralysis. I just bought another property today and am in the market constantly investing in our area.
2 votes Thank Flag Link Wed Jul 8, 2009
Yes, the bottom of the massive foreclosures is still headed our way. Mt. Pleasant still has a huge inventory of unsold new homes from the past 4 years. The Banks have tried every type of deal to move the market. The good news is in 12 months Congress will "fix" the mess it caused.
1 vote Thank Flag Link Mon Jul 13, 2009
I'm afraid SuspectBuyer is probably right. As someone who is interested in the 29401/SOB market, I was struck by an article on the stalled luxury home sales market that appeared in the Post and Courier today (7/12), especially the following portion thereof that I am cutting and pasting below:

"Sales of existing homes priced above $750,000 made up 2.3 percent of all sales in the first three months of this year, the Realtors’ group said. That’s down from 4.4 percent of homes sold in 2007, before high-priced mortgages dried up.

“The high end is the worst performing sector of the residential real estate market, unquestionably,” said Bernard Baumohl, Chief Global Economist of the Princeton, N.J.-based Economic Outlook Group.

The recession and collateral damage in the stock markets, have knocked many luxury buyers out of the market. Falling home prices coupled with new appraisal rules have scuttled many deals. And, lenders have jacked up interest rates and down payment levels for high-priced mortgages.

Since the credit crunch began in the fall of 2007, few investors have been willing to buy mortgage-backed securities because of soaring default rates. The government’s Fannie Mae and Freddie Mac are virtually the only buyers left, but they cannot purchase mortgages above $729,500. That means any lender who makes a mortgage above that amount — known as a jumbo loan — will have to keep the loan on its books.

To compensate for that risk, lenders charge higher interest rates. The average rate for 30-year fixed rate jumbo loan was 6.91 percent last week, according to a survey by Bankrate.com, compared with 5.7 percent on a conventional 30-year fixed rate home loan. That higher rate, for example, means a borrower with a 30-year $750,000 loan would pay almost $600 more a month than at the lower rate.

Rates can be even higher for second homes, which are considered investment properties and therefore riskier for lenders. Second-home buyers play a large role in the luxury market, from Martha’s Vineyard to the ski areas of Colorado.

“The second home market is pretty dead,” Baumohl said. “Banks are being very careful who they provide loans to.”
1 vote Thank Flag Link Sun Jul 12, 2009
Absolutely withourt question.

here is a link to current charleston County foreclosure list


The # of filed foreclosures since Jan1 number in the hundreds.....however the system is slightly bogged down which means we are not even seeing the tip of the iceberg. I personally know of bank owned homes that are just sitting vacant and not assigned to an agent yet - what does this indicate? perhaps even the banks are worried about flooding the market with their inventory.....

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1 vote Thank Flag Link Sun Jul 5, 2009
Is there an estimated date on lifting the foreclosure moratorium? I agree Charleston has a way to go. Charleston peaked much later than the rest of the country so we will hit a bottom later.
0 votes Thank Flag Link Fri Sep 11, 2009
It was first the subprime mortgage holders and now it's time for the option ARM and Prime holders to foreclose in mass. And the MBA forecasts that foreclosures will peak at the end of 2010!

Couple that with no move up buyers and the inevitable lifting of the SC moritorium on foreclosures in the short term and you have a recipe for disaster.
0 votes Thank Flag Link Wed Aug 26, 2009
Another element that is likely to contribute to more foreclosures are the 3 year ARMs that were issues in 2006 and are about to mature. Following that we will see the 5 year ARMs come due. Combine this with continued rise in unemployment and the depletion of personal credit lines and we're in for more trouble. These foreclosures and short-sales will continue to place downward pressure on all home values until they are cleared out and the existing home inventory begins to sell. Although we may be close to the bottom of pricing in general, the recovery will be long and slow with prices not returning to todays levels until as far out as 2014. Mixed good news, given all the money printing the Fed is doing, inflation is inevitable. Which means the price of a loaf of bread is probably going up, but so too should house prices. Hang on, it should continue to be an interesting ride.
0 votes Thank Flag Link Sun Jul 5, 2009
Interesting article on ABC News website - "America's Most Troubled Luxury Neighborhoods"

0 votes Thank Flag Link Sat Jul 4, 2009
We are Realtors in the Phoenix Arizona and have been hit harder than most areas with foreclosures. It is difficult to find properties that are not lender owned (unless they are short sales which will soon be lender owned in most cases)
However, there is a silver lining in the market. Buyers are returning in large numbers and REO's are selling in a few days with multiple offers being the norm. I too believe that a new wave of foreclosures is due soon but, at least here, the savvy buyers are ready, willing and able.
It is an exciting time to be a Realtor in the Valley of the Sun. See more at http://RalphandTricia.com
Web Reference: http://RalphandTricia.com
0 votes Thank Flag Link Sat Jul 4, 2009
Foreclosures are hitting all zip codes regardless of housing price point and quite frankly, I would not be surprised to see another wave coming - around the holidays last year, banks on a National level were encouraged to hold off on foreclosures and then this May, the State Supreme Court put a freeze on foreclosures for loans backed by Fannie and Freddie Mae. Sadly, with the economy and job stats not getting much better between now and then, many of those folks who were struggling to pay their mortgage before are still struggling now. It is expected that we will see another wave of foreclosures, which does mean it is an incredible time to be a buyer in this market. Just because I am an optimistic person by nature, I will leave with another good note - Charleston has fared much better than the rest of the country regarding foreclosure stats and last time I looked, I believe the number was less than 3% of sales in our area were foreclosures.
0 votes Thank Flag Link Sat Jul 4, 2009
This site will guide you to what is currently happening concerning foreclosures. *In 29401, 13 homes are shown as pre foreclosure. 5 are shown as REO, bank owned, and 3 close to being auctioned. Overall, this area is considered much more stable.
Full stats are there for all of Charleston county. Are more coming ? Now doubt there will be more. How many is unclear. 86% of current loans in Charleston are prime, up from 83.6% two years ago. A positive.
The mortgage broker with my company would be happy to give you more statistical insight, Greg Meyer, 843-414-1600. Another resource is the College of Charleston's Dr. Tim Allen.


Tod Edwards
Carolina One
49 Broad St
Charleston, SC 29401
Web Reference: http://Realtytrac.com
0 votes Thank Flag Link Sat Jul 4, 2009
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