Foreclosure Activity in Massachusetts – Mixed Bag in January

What is going on with foreclosures? - Massachusetts Real Estate

Over the last couple of months we have looked at data on recent Foreclosure Activity and saw that is was up significantly.  This month we wanted to follow up on those articles to see what the first of the 2015 data has to say.

Recent Massachusetts Foreclosure Activity:

As a recap there are three items that are tracked for foreclosures which are the petitions (which is the first step for a foreclosure), the actual auctions and finally the foreclosure deeds, which is where there bank takes the property back at the auction (when nobody else is willing to buy it at the auction).

We have seen in our analysis of the November 2014 data and the December 2014 data that all 3 of these items were up a bit over what they were for the same month of the previous year.  In January we see the first instance of one of these categories not increasing from the previous year.

Foreclosure Deeds in Massachusetts fell 27.4% year over year in January with only 257 compared to 354 in 2014.  This was actually the lowest total for any month since last July as well.  This is a seemingly encouraging figure.

However the two initial drivers for foreclosures were both up, as they have been for many consecutive months.  Petitions continue to rise significantly year over year posting a 70% increase in January of 2015; however this is actually the lowest percent increase in a month since last September.  So while still increasing the rate of the increase is actually down a bit.

Lastly we can look at the auction announcements.  To go in the complete opposite direction of the slowing petitions and reversing deeds the announcements were though the roof.  They increased 250% with 575 in January of 2015 compared to only 165 in 2014.  This was the single largest annual increase since April of 2007!

What Does This Mean For The Market? :

The data is a bit inconsistent this month so what does all of this mean?  As mentioned in previous analyses it is important to understand the lag time in a foreclosure.  Once a petition is filed it will be several months before a property would actually go to auction and if the bank takes it back at auction it can sometimes take months to file the foreclosure deed.  Therefore seeing a large increase in the number of petitions is a leading indicator that in a few months there will be an increase in auctions and then shortly after an increase in foreclosure deeds.  In this case there has been a consistent increase in petitions for almost a year now.  The auctions have been increasing every month for shorter time as well.  So it would seem to me that the drop in actual deeds is just an anomaly this month and would expect that to continue to track with the other data over the next several months.

Conclusion:

The pattern seen over the last several months continues in general.   While the decrease in foreclosure deeds is somewhat encouraging the fact that petitions are still up significantly and auction announcements spiked leads me to believe that this decrease is just a temporary reprieve and the deeds will continue to rise throughout the year to track with the other indicators over the last several months.

To reiterate the advice in our previous articles, if you are thinking about selling a house this year you might want to get it to market ASAP before these other properties start coming to the market.  If a large number of these start to come onto the market prices could dip and the days on market for places could increase.  Once this happens you may get hit with the undesirable situation of selling for less than expected while also taking much longer to sell than you had anticipated.

If you want to sell your house fast and easy schedule a consultation with us today.

 

 

All data for this article is from Banker & Tradesman via The Warren Group:

January Data:  http://www.bankerandtradesman.com/news163080.html

 

(Image Credit: Adapted from housequestion004)

 

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