Columbia, South Carolina with high foreclosure rates

According to the latest findings from the real estate research group ATTOM, foreclosure figures across the country have been decreasing this year. However, the state of South Carolina, specifically the capital city of Columbia, stood out with one of the highest foreclosure rates.

Columbia ranked second in the list of foreclosure rates among the metropolitan areas studied. The analysis took into account the population living in these areas. However, Columbia was not the only city in South Carolina to make the list, as Spartanburg also appeared, ranking fifth.

Some analysts argue that although the rate is concerning, it remains low compared to previous figures in the state. Others warn that ranking so high on the foreclosure list is an important indicator that the city is facing more serious economic issues.

They also noted that this high foreclosure rate could have been influenced by the national economic trends in the current real estate market. The end of pandemic-era foreclosure moratoriums, high interest rates, and inflation are also key factors.

Felicia Kilgore, director of community development in Columbia, states that the most affected are homeowners who purchased properties above their budget limits, even those who met loan requirements but accepted unaffordable or higher loans. These are the homeowners who are most feeling the impact of unexpected cost increases and interest rates, especially considering that living costs have risen and stretched family budgets.

During the pandemic, several financial institutions and the government provided mortgage relief measures, allowing borrowers to pause or reduce payments. However, these pauses did not modify or reduce the total loan amount, as the homeowner still must repay the full value. Now that the grace periods have ended, homeowners who took advantage of these measures are still unable to meet their mortgage payments.

According to administration spokespersons, Columbia’s job market makes some citizens less able to withstand the economic pressures caused by rising costs. It’s not that the city has a high unemployment rate; it’s that wages aren’t high enough, they said.

Census data shows that Columbia’s unemployment rate is below the national average, at 3.5%, but nearly a quarter of its residents were below the poverty line in previous years. In Spartanburg, the poverty rate is 25.7%.

Despite Columbia’s current ranking, the rate is less alarming from a historical perspective, given that rates are much lower than during the Great Recession, which was driven by bad mortgage loans that caused a significant percentage of homeowners across the United States to fall behind on mortgage payments or face foreclosure, explained real estate market specialists.

And while the rate is historically low, it is important to closely analyze a broader view of Columbia’s economy because this situation—the increase in foreclosures—could be a sign that the city is experiencing economic difficulties.

One of the most important factors to consider that is driving up the rates is the reduction of legal protections against foreclosures by the South Carolina Supreme Court. These measures could further harm homeowners if economic conditions worsen.

And although federal laws still require most lenders to offer loss mitigation opportunities, the removal of some protections could further burden the situation facing homeowners in Columbia.

Available foreclosures: 

Columbia: 310 homes available

Spartanburg: 270 homes available

By Elias DaSilva | September 20, 2024.