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Honolulu, Hawaii
Foreclosure rate: One in every 84 households
Percent increase: 142%
National rank: 128th
Unemployment rate: 5.9%

Honolulu has one of the most expensive and constrained housing markets in the nation. Squeezed between mountains and the sea, there simply is little easily developed land. As a result, the median home price sold during the third quarter of 2009 was $450,000, according to the Wells Fargo-National Association of Home Builders housing opportunity index.

Household income may be higher than average but the exorbitant home prices makes homeownership challenging for residents. Many resorted to affordable mortgage products, such as interest-only loans or option ARMs, which tended to postpone, without solving, payment problems.

Too many Honolulu residents devote too high a percentage of their household incomes to housing expenses. When they hit a rough financial patch, they may be unable to navigate it.

Another factor that contributed to the high increase in filings last year is the large military presence in town, according to David Kucic, a real estate agent with RE/MAX Honolulu.

During the past two years the foreclosure rates for military towns was four times higher than the rest of the nation.

"A lot of [military personnel] got here in 2005 and 2006 and they bought homes," he said. "After three years, they get shipped out, and with the price drop, they don't have many choices in what they can do."

Rents don't cover their mortgage and they can't sell their homes for what they paid. "Almost everyone who bought between 2005 and 2008 is upside down," said Kucic, owing more than what their homes are worth.

The saving grace is that even though filings are way up -- nearly 700% over two years -- many never go all the way to an auction sale. The military give military personnel partial protection under the Service members Civil Relief Act. And other delinquencies get solved through mortgage modifications, short sales or other workouts, according to Kucic.

NEXT: Roanoke, Va.
Last updated February 01 2010: 3:46 PM ET
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