However, this only puts a minor dent into the Tri-County foreclosure problem. There are currently 596 active short sales or foreclosures listed for sale in the mls. According to my research there are over 3000 homes in some sort of distressed status in the Tri-County area right now. This would mean that close to 30% of the Tri-County real estate market contains homes in some phase of distressed mitigation.
The foreclosure inventory is going to continue to grow due to future mortgage resets, increasing unemployment and declining real estate values.
I went on 1250 WTMA on Tuesday to discuss this problem but I am having a tough time finding anyone in Charleston who wants to help me address the problem with proactive solutions. Meanwhile some of the banks are holding short sales on their books because they are stalling to make a writedown. This creates a high risk homebuying environment when there is a lack of transparency for distressed houses in subdivisions all over Charleston.
Would you want to buy a $200k home if there is an identical one down the street that nobody knows about that is about to go to auction or a short sale and sell for $150k? If this becomes a chain reaction and all the neighbors begin to "Jingle Mail" their keys to the bank then the buyer of the retail priced home @ $200k is SOL of $50k in equity real quick.
With all this hidden and invisible distressed real estate it is next to impossible for real estate agents to properly advise their clients on existing market conditions.
Tri-county to get $7.4M to help mitigate foreclosures
By Ashley Fletcher Frampton
aframpton@scbiznews.com
Published March 26, 2009
Housing officials in the tri-county area have learned they will receive $7.4 million to buy foreclosed homes to sell or rent at affordable prices.
The money comes through the federal government’s Neighborhood Stabilization Program, which is meant to prevent blight and declines in home values in neighborhoods with clusters of foreclosed homes.
At the same time, the program increases the inventory of affordable homes for those people earning 120% of area median income, said Tammie Hoy, director of the Lowcountry Housing Trust.
State housing officials announced the award to the Lowcountry counties yesterday. South Carolina received a total of $44 million for the program.
Hoy estimates that the money will allow local housing officials to purchase about 100 homes now owned by banks. The $7.4 million will also cover the cost of any needed repairs to the homes, which might have been vacant for months. In addition, the money can provide homebuyers with assistance in making a down payment.
The money likely will flow to local housing officials by the summer, Hoy said.
By April 15, her organization and its partners must submit to state housing officials the homes they intend to purchase. The trust’s original application sought nearly $20 million for the three counties, so local officials must pare down the list of homes they plan to buy.
They’ll also update their lists of foreclosed homes on the market. Some might have sold in recent months, Hoy said.
“Which is a good thing,” Hoy said. “We are glad they are being sold.”
She emphasized that the money isn’t meant for isolated foreclosures. The federal program targets clusters of foreclosures or likely foreclosures that could bring down neighborhood values.
Hoy said the money could end up going further than the estimated 100 homes. When housing officials sell a home they have purchased, sales proceeds will be available for additional investments.
She said the original request for $20 million was ambitious, considering South Carolina received a total of $44 million for the program for all 46 counties.
The money comes through the federal government’s Housing and Economic Recovery Act of 2008. This year’s federal stimulus plan includes $2 billion for the program, but details on applying for those dollars are not expected until May, Hoy said.
The homes would be available to people earning up to 120% of area median income. Based on 2008 data, individuals earning up to $49,000 and families of four earning up to $79,000 would qualify, though Hoy said the program might use updated 2009 income data.
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