Federal Tax Credit Failed to Prevent Full-Year Foreclosure Increase- By: John Cutts
The U.S. federal tax credit made available to first time homebuyers in the first half of 2010 failed to arrest increases in foreclosure numbers for the full year. In South Carolina, the increase in foreclosure numbers in 2010 was over 30% compared with 2009 levels.
Distressed homes in Greenville and in other areas of the state continued their rise in 2010, with the state recording a 31.4% increase in foreclosure totals last year compared with 2009 levels. The state was ranked 16th among the 50 U.S. states in terms of foreclosure levels last year. A total of 33,063 foreclosure-related filings was posted in the state in 2010, giving the region a 1.6% foreclosure rate for the period.
Only two states in the Southern region of the U.S. recorded a higher total than South Carolina distressed homes and foreclosures, with Florida and Georgia recording bigger ratios in terms of foreclosure per property. The whole country's foreclosure-related filings ranged between 2.8 and 2.9 million last year, demonstrating that the real estate crisis is far from over in the U.S.
According to some analysts, the national total is even worse than it appears, given that the federal tax credit program was in place in the first half of 2010 and foreclosure processing and sales hit a snag in the fourth quarter due to the robo-signing controversy. However, some housing industry experts did offer some hope, stating that the housing industry crisis has already hit bottom and recovery will be starting this year in most U.S. markets, although at a pace that will not be felt by most homeowners.
Analysts added that foreclosed and distressed home listing will increase further this year as around 250,000 foreclosure cases that were halted in the fourth quarter of 2010 will be restarted in 2011. However, optimists have stated that this might mean that the housing market will hit its worst this year and will be on course for a recovery come 2012.
Some analysts also added that the difference between 2009 and 2010 figures might be bigger than they seemed because of the federal tax credit, which inflated housing unit sales in 2009. For South Carolina, analysts are hoping that the worst will be over before 2011 ends.
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John Cutts has been educated in the finer points of the foreclosure market over 5 years.