RealtyTrac and CoreLogic are two of the biggest reporters on foreclosure properties. This post summarizes some of their 2012 foreclosure reports. The first thing to consider when you’re looking at foreclosure reports for Charleston, South Carolina, and the rest of the United States is that states handle foreclosures in different ways. Judicial states require court action before banks can foreclose on real estate, and non-judicial states allow banks to foreclose on properties without having to go to court. South Carolina is a judicial state; therefore, the foreclosure process takes longer.
The difference in the way states handle foreclosures has basically led to two separate foreclosure markets in the country. In non-judicial states, the process is quicker, and foreclosure rates are falling. Non-judicial states saw higher foreclosure rates at the beginning of the housing crisis, but now, they have worked through the backlog, meaning fewer foreclosure filings each month. The opposite is true for judicial states: at the beginning of the crisis, their rates were lower because banks had to first prove a property was delinquent before it could begin foreclosure proceedings. Now that banks in judicial states have worked through the court process, foreclosure activity is going up, because they got a late start on working through the backlog of foreclosures. According to RealtyTrac, 25 states saw foreclosure rates drop in 2012 — Nevada’s foreclosure rate went down by 57% — and 25 states saw an increase in foreclosures — New Jersey’s foreclosure rate went up by 55%, and South Carolina’s went up by nearly 20%. Overall, national foreclosure filings were down 3% for the year in 2012.
RealtyTrac estimates that nationwide, homes in the $100,000 to $200,000 range make up the largest percent of the foreclosure inventory — 37%. Homes in the $200,000 to $300,000 range make up another 15% of the market.
CoreLogic notes a 0.7% reduction in SC’s 2012 foreclosure inventory. To put the CoreLogic numbers into perspective, 3% of all mortgages in SC were in some state of foreclosure in 2012. Florida had a foreclosure inventory of 10.1%, and Wyoming had a foreclosure inventory of 0.4%. In 2012, at total of 10,994 homes were lost to foreclosure in SC. According to RealtyTrac, 1,259 of those 2012 foreclosure sells took place in Charleston County.
RealtyTrac states that Charleston County’s average foreclosure sales price was $199,714. While South Carolina’s foreclosure rate is higher than the national average, Charleston’s is lower. In Charleston County, the total number of homes in some state of foreclosure in 2012 was 2,602. Bank-owned properties accounted for 23% of the foreclosure-market inventory while pre-foreclosures made up 71% of the market. The rest of the properties — 6% — were in the auction stage.
On a positive note, the gains made in home prices this year in the regular real estate market have helped many homeowners out of their negative equity situations.
If you have questions about how foreclosures affect the Charleston real estate market or would like insights on buying a distressed property, feel free to give Bob Brennaman a call at 843-345-6074.