Foreclosure Activity in Massachusetts – February Still Inconsistent

Today we will continue to examine foreclosure data for Massachusetts as we have over the last couple of months.  This month we especially want to follow up on the article looking at the January 2015 data to see if those trends are still holding up.

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).

Previously we have seen all of these measures increasing in the November 2014 data and the December 2014 data.  In January 2015 we saw the first instance of one of these categories not increasing from the previous year.  In the February data we see similar results as in January with things trending more towards what we had been seeing at the end of 2014.

In February Foreclosure Deeds in Massachusetts fell 14.6% year over year with 311 compared to 364 in 2014.  While falling for the 2nd consecutive month the change is much smaller than the 27.4% seen in January.

However just like in January both of the two initial drivers for foreclosures were up, just as they have been for many consecutive months.  Petitions continue to rise significantly year over year posting a 98% increase over February of last year.  This is back to the ~100% increase seen in each of the last few months of 2014 and up from the 70% increase in January of 2015, which as noted in last month’s report was the lowest percent increase since last September.

Lastly we can look at the auction announcements.  These were up a huge amount once again increasing 242% year over year with 592 announcements in February 2015 compared to just 173 in 2014.  In January they had been up 250% which was noted to be the largest annual increase seen since 2007, so keeping pace with last month shows that this is a very high increase.

What Does This Mean For The Market?:

While the data is still a bit inconsistent this month it does seem to be normalizing a little bit more.  Once again it is vitally important to understand the lag time in the foreclosure process.  Recall that 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 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 sometime after that an increase in foreclosure deeds.  In Massachusetts there has been a consistent increase in petitions for about a year now.  The auctions have also been increasing every month for some time now as well.  It still appears to me that the drop in deeds is just an anomaly and would expect that to track with the other data over the next several months.  This seems even more likely as the decrease was only about half what it was the previous month while the other factors were still up significantly more.

Conclusion:

The pattern seen over the last several months continues in general.   While the decrease in foreclosure deeds again in February is somewhat surprising, and encouraging for distressed homeowners, the fact that petitions are still up significantly and auction announcements stayed consistent with the giant spike from last month leads me to continue to believe that the decrease is just a temporary reprieve and the deeds will continue to rise throughout the year to track with the other indicators.

To reiterate the advice in our previous articles, if you are thinking about selling a house this year you should consider getting 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.  If this happens you may get hit with the tough situation of selling for less than expected while also taking much longer to sell than you had anticipated.  

 

Do you need to sell your Massachusetts (or New Hampshire) house fast?  If you would like to sell your home fast and hassle free schedule a consultation with us today.

  

 

 

All data for this article from Banker & Tradesman via The Warren Group: February Data:  http://www.bankerandtradesman.com/news163421.html  

 

 

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