While there has been an overall consensus from local economists and foreclosure attorneys that foreclosures among the Hawaiian Islands are worsening, it may not be to the extent at which the research company RealtyTrac has been reporting. In recent weeks, concerns have been rising as to the methods by which the California based research company is arriving at their foreclosure figures.

RealtyTrac collects data from an estimated 90% of the United States population, reaching almost 2,200 counties nationwide. However the problem with the data that is being reported on foreclosures is that it may be counted up to three times in separate months. Foreclosures can be counted in three stages, first as a default loan, then as a trustee sales notice and finally as a real-estate-owned transaction. By incorporating all three levels into their Foreclosure tally, RealtyTrac leaves the possibility of including homes which were previously included in the foreclosure rankings at a different level, thus skewing the reported number of foreclosures on the Hawaiian Islands.

While RealtyTrac runs the chance of misreporting state foreclosure ratings, there is no defined way for correctly counting the number of foreclosures within a particular county or state. This makes RealtyTrac’s findings the most viable data for many individuals and organizations to reference, even though it’s finding are “debatable”.

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RealtyTrac Claims Foreclosures Have Risen 217%. Debatable.

These foreclosure properties are REO’s and lender sales, NOT action block foreclosures. Foreclosures that are REO (Real Estate Owned) and lender sales are less complicated to make offers on than auction block foreclosures, but there are still some considerations to buying these types of properties so you should consult an experienced agent of you are considering one of these. You can save the search also if you would like to be notified when new properties of this type come on the market. There is a FAQ regarding both of these types of listings on the website. Check it out!

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New! Hawaii Foreclosure and Short Sale Listings

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September 2008 Hawaii Real Estate Discussion – Focus On Foreclosures

“Hawaii ranks 45th in Foreclosures” July 10th Article from Star-Bulletin.

The other is negative:

“Foreclosures up again from last year” Source: July 10th Honolulu Advertiser

What’s very curious is that they are reporting on the exact same set of statistics from a recent survey from Realtytrac.

The Glass Half Full Approach:
Let’s start with the positive one from the Star Bulletin (“Hawaii ranks 45th in Foreclosures”), the accurate one. This is the only article of the two that includes quotes from Realtytrac’s people. It’s encouraging that the writer who actually listened to the report’s author comes away with a more positive outlook.

The Star-Bulletin article states that Hawaii is 45th out of 50 States in the number of foreclosures and that foreclosures in June were down 17% from May. In the article, Realtytrac’s spokesman asserts that foreclosures aren’t a major threat to the market.

Headlines aside, we should take an objective, quantitative look at Hawaii’s foreclosure rate versus a market that is actually suffering. The difference is staggering: In Hawaii we only have 1 foreclosure for every 3,732 households. In Nevada, it is 1 for every 122 households, now that’s ugly!

The Glass is Half Empty Approach:
The dark side has spoken, and this time it’s the Honolulu Advertiser – oh no, foreclosures are up from a year ago! And what’s worse – they are up again. Not just up once, but up again, and again, and again. They had enough room. They could have added some additional ‘agains’. See, being up is not bad enough, being ‘up again’ is much worse. You must understand these things.

The article says that

“Hawaii’s foreclosure count continues what has been a steady rise in troubled mortgages.”

This is not the case. Recall that foreclosures are actually down 17% from May to June. Futhermore, Hawaii foreclosures were down 22% from April to May (Pacific Business News, June 13, 2008).

Fortunately, these numbers suggest a very encouraging trend. Unfortunately, these numbers make it harder for the reporter to tell the simplest, most sensational story-so of course they are omitted from the article, and a lot of readers are left in the dark.

Bottom line, foreclosures are not a big issue in Hawaii. We are consistently near the bottom in the number of foreclosures and they are too few to have an effect on our real estate market.

Post from: Hawaii Real Estate Reporter

Is the Glass Half Empty or Half Full? Newspapers Put Opposite Spins on Foreclosure Numbers

It’s time for some good old media hysteria. As mentioned in the Honolulu Star Bulletin on Wednesday, May 14, 2008

Hawaii’s foreclosure rate tripled in April, with a 218 percent increase over the year-earlier period.
The state climbed to 36th in a national foreclosure ranking last month, with 210 foreclosures filed, or one for every 2,381 households,

My god, foreclosures up 218%! It’s time to build a bomb shelter and store food. In fact, curl into a ball right now and play dead, just in case there are any bears in the area.

The article says that Hawaii is experiencing a “relatively small number” of foreclosures. This is a tremendous understatement: 1 out of 519 US homes are in foreclosure, only 1 out of 2381 Hawaii homes are in foreclosure.

We’re in good shape with regard to foreclosures. You don’t have to be a rocket scientist to figure this out. (Although a research background in non-jet propulsion can help in any situation)

The outlook on Oahu is even better than the outlook for the state as a whole: UH’s Economist says that he thinks that the 218% increase mostly represents neighbor-island foreclosures. Among those, he says, many are probably mainland second-home buyers.

Don’t let these headlines scare you. We’re OK.

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Foreclosures up: “Okay, on my word, everybody panic. Wait for it . . . wait for it . . . GO!”