Oxstones Investment Club™Las Vegas always wins the title for worst foreclosure rate in the country. But these 10 unexpected cities have the fastest-growing rates out of the 100 worst-hit places.
Spartanburg, S.C.
Population: 287,000
Foreclosure rate: One in 60 homes
Percent increase in 2010: 228%
Spartanburg is found in the upstate portion of South Carolina, the fastest-growing region in the state. But in the last year, it also had the country’s fastest-growing foreclosure rate.
The 228% spike in foreclosure filings is the result of two converging trends, according to city manager Ed Memmott: Questionable mortgages used to buy homes — especially investment homes — during the boom; and job losses.
The unemployment rate hit 12.7% in 2009 before dropping to 10.9% in 2010 — well above the national average. And, as many of those workers were laid off, they fell behind on their mortgage payments.
Still, the local economy seems to be on the rebound, with growth boosted by a BMW plant that arrived about 15 years ago and brought additional manufacturing jobs with it.
“Every month we see more announcements of hiring,” said Memmott. “We’ve also seen an uptick in revenue aligned with retail sales, and that bodes well.”
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©Thinkstock
Albuquerque, N.M.
Population: 529,000
Foreclosure rate: One in 46 homes
Percent increase in 2010: 60.32%
One of the fastest growing metro areas in the nation, Albuquerque was one of the nation’s fastest-growing metro areas over the past decade, drawing the young and retirees alike thanks to a warm climate and plethora of jobs, from tech positions in atomic energy and solar to manufacturing positions at the new Tempur-Pedic mattress plant.
The recession, however, applied the brakes to the area’s economy and Albuquerque has been slow to recover. Unemployment is still on the upswing, rising to 8.6% in November from 7.8% a year earlier. Plus, the metro area lost 13% of its construction jobs last year, according to the Associated General Contractors of America.
Those layoffs have put many people behind on their mortgage payments. As a result, the metro area had the 67th highest foreclosure rate in 2010 among the 206 areas reported on by RealtyTrac.
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Myrtle Beach, S.C.
Population: 263,866
Foreclosure rate: 2.25%
Percent increase in 2010: 44%
The beaches, amusements and climate of the Myrtle Beach area make it a major draw for vacation-home buyers. The population grew by more than a third in the past decade, making it the country’s 11th fastest-growing city.
The economy here, though, was badly affected by the recession. With discretionary income reduced, the area’s tourism industry suffered; unemployment soared. There has been a slight rebound in hiring, but the unemployment rate was still 11.8% in November, down from a whopping 12.1% in November 2009.
Under those conditions, the spike in foreclosures, up another 44% in 2010 after a huge run-up of 446% in 2009, was no surprise. The increase may have been even worse because such a large percentage of residences here are second homes.
According to Brad Dean, president of the Myrtle Beach Chamber of Commerce, investment properties in which the owners got in over their heads account for a good portion of foreclosures.
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©Savannah CVB
Savannah, Ga.
Population: 343,000
Foreclosure rate: One in 40 homes
Percent increase in 2010: 37%
The economic recovery in metro Savannah has lagged, with unemployment actually rising in November to 8.9%. That has produced a bulge in foreclosures.
A couple of years ago, most area foreclosures were in Savannah’s Historic District or The Landings, charming neighborhoods where home prices were quickly bid up during the boom and went down quickly in the bust.
Most of the area’s new foreclosures are concentrated in less fashionable communities, according to Steven Fischer, a former president of the Georgia Association of Realtors and co-owner of ERA Kelly & Fischer in Savannah.
“These are investor properties in older, lower-end homes, mostly under $100,000 and some under $50,000,” he said. “The investors are having trouble renting the properties and they’re losing them.”
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©PatrickSchneiderphoto.com; Charlotte Chamber of Commerce
Charlotte, N.C.
Population: 1.7 million
Foreclosure rate: One in 50 homes
Percent increase in 2010: 37%
The Charlotte area was one of the hardest hit parts of North Carolina, with the lion’s share of mortgage defaults coming from changing economic fortunes.
“Filings will likely remain at an elevated level until the overall economy improves,” said Will Corbett, director of North Carolina’s State Home Foreclosure Prevention Project.
The area’s unemployment rate has fallen lately, down to 10% in November, so that will hopefully start to bring relief.
Additionally, the metro area has grown by more than 30% in the past 10 years to become the 33rd largest metro area in the nation. One big draw was the city’s emergence as a major financial center.
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©Tulsa Metro Chamber
Tulsa, Okla.
Population: 929,000
Foreclosure rate: One in 50
Percent increase in 2010: 37%
Tulsa’s economy has diversified since the city was smacked by the ’80s oil bust. Today, finance, aerospace and technology all contribute jobs. “And the telemarketing industry is very strong here,” added O.C. Walker, executive director of the Tulsa Developmental Authority.
He also pointed that unemployment has been running well below national levels, although the rate increased to 7.5% in November from 7.2% a year ago.
Population growth has been middling, increasing just 8% between 2000 and mid-2009. The housing market never bubbled and there’s a great deal of room for development, so home prices have remained affordable, with a median price of $142,000 at the end of the third quarter of 2010, according to the National Association of Home Builders.
The stable housing market and affordable prices meant that relatively few mortgage defaults were the result of dangerous loans.
Instead, it was the upturn in job losses that triggered most of the jump in foreclosure filings, which rose 38% in 2010 after jumping 68% the year before.
See the full gallery of 10 Foreclosure Hotspots
Tags: Foreclosures, real estate