Fewer than 10 percent of all residential sales in Hawaii during the third quarter were foreclosure sales, according to a new report from RealtyTrac, which found that more than 19 percent of all homes sold nationally were either bank-owned or in some stage of the foreclosure process.
There were 289 sales of properties in Hawaii that were foreclosure related during the quarter, 41 percent fewer than in the same quarter in 2011, and they accounted for 8 percent of all home sales, according to Irvine, Calif.-based RealtyTrac.
Nationally, a total of 193,059 properties in some stage of foreclosure were sold during the quarter, a 3 percent decline from the third quarter of 2011, RealtyTrac said. Foreclosure sales accounted for 19 percent of all home sales, the same percentage as in the third quarter of 2011.
In Hawaii, Maui County had the highest percentage of foreclosure sales at nearly 18 percent, followed by Kauai and the Big Island at 12 percent. Foreclosure sales on Oahu amounted to 5 percent of all residential sales.
The report also found that sales of homes in some stage of foreclosure outnumbered sales of bank-owned properties during the quarter.
“The shift toward earlier disposition of distressed properties continued in the third quarter as both lenders and at-risk homeowners are realizing that short sales are often a better alternative than foreclosure,” Daren Blomquist, vice president of RealtyTrac, said in a statement. “However, the scheduled expiration of the Mortgage Forgiveness Debt Relief Act at the end of this year could stifle this trend toward short sales.”
Blomquist noted that if the law expires as scheduled, homeowners who sell in a short sale could be taxed on the portion of the unpaid loan balance not covered by the sale proceeds, which may be considered taxable income.
(Report Provided by Pacific Business News)