Short sales/Foreclosures Increase

The number of homes in jeopardy of foreclosure increased by 27.1% statewide in South Carolina when compared with the fourth quarter of 2008, according to RealtyTrac data. The number of homes across South Carolina in some state of foreclosure increased to 7,016 in the first quarter of this year, from 5,520 in the fourth quarter of 2008. Charleston County bank owned properties increased by more than 150% from the Q4 2007 to Q1 2008, going from 119 to 304. This is not the total number; this just represents what happened in those quarters.

Right now there are about 1250 active listings amongst our inventory of over 10,000 active listings that are either short sales or foreclosures. This is a hard number to get a hold on since many short sales and foreclosures are not listed this way. This number of 1250 is my educated guess based on my knowledge of the market. I expect that number to continue to increase to about 25% of the active market by August. That will present a problem when only about 25% of the active listings are selling.

recessions

The National Bureau of Economic Research, NBER, is a government body whose sole function is to keep track of the country's economic expansions and contractions and determine which month was the peak of an expansion and which month was the bottom of a contraction. For instance, they have announced that December of 2007, was the peak of the last expansion. If you look at the general pattern of expansions and contractions on their website, you will notice that expansions generally last from 3-5 years while contractions generally last about 1-1.5 years. So, about 3 times as much expansion as contraction. What's interesting is the period from 1982 until now. In those 27 years, we have had 24 years of expansion and 3 years of contraction. That's 8 times as much expansion as contraction. There is a price to be paid for that and we are paying it now.