Beaufort sees no end in sight for foreclosures
05/31/2010 12:00 AM
05/31/2010 12:11 AM
Even though unemployment rates appear to have topped out and home sales are slowly improving, the wave of foreclosures still is growing.
And there is no end in sight, say real estate agents and attorneys.
There are more than 300 properties scheduled to go on the block at Beaufort County’s monthly foreclosure sale June 7, the most many can remember. One in every 104 homes in Beaufort and Jasper counties was in foreclosure in the first quarter, more than in any of the 20 other areas for which RealtyTrac has data in South Carolina.
Cathy West Olivetti, a Hilton Head Island attorney whose firm represents distressed homeowners, now helps older professionals such as doctors, a demographic she didn’t see earlier in the downturn.
Olivetti said it’s especially sad to see properties of her friends, neighbors and colleagues appear on the list to be sold on the courthouse steps.
If there is an economic recovery under way, it’s the slowest one her generation has seen, Olivetti said.
“I want my world back,” said Olivetti, 49, whose firm now devotes about half its staff to “loss mitigation.” The number of Beaufort County homes in some stage of foreclosure has increased from single digits during some months of 2005 to more than 250 for each of the first four months of 2010, according to RealtyTrac, a California firm that compiles such data.
The issue of increasing foreclosures resembles a self-fulfilling prophecy, said Tom Brooks, a real estate attorney on Hilton Head for 30 years.
In financial terms, people who could stay in their homes if they refinanced at today’s low interest rates can’t do so because their property — dragged down by others’ struggles — no longer appraises for what it once did, he said.
In personal terms, couples who divorced because of the stresses of the financial crisis often find themselves in foreclosure once they split, exacerbating the broader economy’s problem, he said.
“Now you’ve got two households with the same amount of income that couldn’t support one household,” he said.
Some people facing foreclosure never dreamed they would find themselves in trouble financially and are reluctant to use clinics like those organized by the nonprofit Family Services Inc.’s Home Ownership Resource Center, program coordinator Mary Regan said.
Flush with new federal grant money, the organization is trying to reach foreclosure victims with online programs, she said.
“It’s a whole new mind-set for them,” Regan said.
Ongoing foreclosures mean the supply of homes continues to outpace demand, which drives down prices, real estate agents said.
Todd McDaniel, president of the Beaufort County Association of Realtors, said he fears a developing “shadow market” in which many homes that have been sliding toward foreclosure will plunge into it.
As borrowers who have so far staved off default run out of options to pay their loans, McDaniel worries the county’s monthly lists will grow.
As a result, today’s sellers need to realize downward pressure on prices likely is to continue, he said.
If your neighbor’s home sold for $250,000 today, “you better price yours at $245,000,” said McDaniel, a partner in Island Realty of Beaufort.
So when might the tide of foreclosures ebb? Most of those surveyed pointed to the same need: jobs.
Even though Beaufort County’s April unemployment rate of 7.3 percent was the lowest in the state, many of those workers still are struggling because they’re making only a fraction of what they did before the recession, Olivetti said.
Jeffrey Reilley, an attorney for three years at Laurich & Wiseman on Hilton Head and in Bluffton, longs for the day when his files contain 50 percent distressed mortgage cases rather than the current 80 percent.
He’s not expecting that day to come any time soon.
“All the inventory’s going to have to get worked out sooner or later,” he said. “It’s just going to be slow.”
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