Foreclosure Activity in Massachusetts – Experts Back Peddle in May  

Foreclosed Building - MA Real Estate

We are continuing to examine foreclosure data for Massachusetts as we have over the last several months.  Last month we saw petitions and foreclosure deeds continue to increase but an interesting blip of auctions actually decreasing for the first time since we have been tracking the data. 

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 scheduled and finally the foreclosure deeds, which is where the bank takes the property back at the auction (when nobody else is willing to buy it at the auction).

When we first started tracking this data for the end of 2014 we were seeing all 3 indicators increase each month from the same month the previous year.  In January 2015 and February 2015 we saw the foreclosure deeds actually fall year over year despite both petitions and auctions going up, and consistently going up for many months.  In March that changed back to what we had seen with all metrics once again increasing and as mentioned above auctions decreased last year but the other metrics increasing. 

Last month petitions were “only” up 29.5% from the year before which got some pundits saying that we might have be heading to a more level market since that was the smallest increase since February of 2014 when petitions declined year over year the last time.  This May there were 878 petitions filed compared to only 573 petitions in May of 2014 for an increase of 53.2%.  Which lead the experts to lament how frustrating to see a continuing increase in foreclosure activity in Massachusetts.

Next we look at the auction announcements.  Last month they were actually down for the first time since we have been looking at the data and show a sharp decrease in the recent climbs that have been seen.  The decline was pretty minor with a 3.2% decrease.  We see another small decrease this month.  In May 2014 there were 617 and were down to 571 this May for a small 7.5% decrease.  However there were huge increases of around 250% each of the first 2 months of the year so year to date auctions are still up 58% over 2014.  Still it is a little surprising to see this down again with petitions still steadily increasing. 

Finally we will look at the Foreclosure Deeds.  Deeds are up quite a bit in May with 344 deeds recorded this year and only 189 filed in May 2014.  This is an increase of 82% over last year’s numbers.  Looking at this month’s gains, along with the last two months of greater than 50% increases, banks are starting to accumulate a lot more inventory.

What Does This Mean For The Market? :

Even with the decrease in foreclosure deeds seen in January 2015 and February 2015 with the sharp increase the last 3 months they are up 18.1% overall for the year so far.  So banks have been taking more properties back, and the rate is accelerating.  This also can help to possibly explain the decrease in auction announcements.  Since these figures include auctions that get canceled or rescheduled, if more auctions are taking place, as evidenced by more foreclosure deeds being filed, this would eliminate the rescheduled auctions so this could be one reason to help explain that fact. 

Conclusion:

With petitions still chugging along there is no reason to think that foreclosures will subside anytime soon.  We should continue to expect more and more houses to go back to the bank and for that inventory to rise.  In fact the last 3 months have seen big increases in properties being taken back by the banks and this is right when you would expect that some of the early increases in petitions over a year ago to really start getting cleared up.  While banks are unlikely to flood the market they will at some point be bringing some of this building inventory to the market which will affect both prices and the supply and demand curve.

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:

May 2015 Data:  http://www.bankerandtradesman.com/news164516.html

 

 

(Image Credit: gratisography.com)

 

Speak Your Mind

*