Foreclosure Activity in Massachusetts – Still rising in June  

 Foreclosure Newspaper - MA Foreclosure Real Estate

We are continuing to examine foreclosure data for Massachusetts as we have over the last several months.  There is a little bit of a pattern going on the last few months were we see petitions and foreclosure deeds continue to increase but auctions actually decreasing and this is the case again in June. 

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 the foreclosure deeds fell year over year and auctions were up huge amounts of around 250% each month.  Now we are in the 3rd month in a row of where deeds are up but auctions are down by a small single digit percentage.  Petitions are the only completely consistent metric with 16 straight months of increases over the same month the previous year. 

Starting with those petitions as mentioned they have now increased year over year for 16 consecutive months.  In June they were up 81.6% from last year with 886 filed in June 2015 compared to 488 in June of 2014.  Also keep in mind that since they have been going up for over a year that these increases are on numbers that were up from the previous year.  Last year there was a 99.2% increase from June of 2013 so the fact that the increases are still almost doubling shows a really big increase from 2 years ago.  Overall we see that there were only 245 filings in June 2013 so the increase since that time is 262%!

The last two months we have commented on some of the sound bites made by local experts on what the petition data was signaling, in April they said it looked like we might be seeing a stabilization in the market as the increase was the smallest seen since the last time they decreased.  However in May they were much higher again and the commentary was how it is frustrating that the increases are persisting.  This month no mention qualitatively either direction, and they just state that we should expect to see petitions to increase through the end of the year.

Next thing to look at are the auction announcements.  As mentioned already they have been down slightly the last two months and they were again this month.  Again the decline was very minor with only a 4.2% decrease with 504 in June 2015 compared to 526 in 2014.  There had been a 7.5% decrease in May and a 3.2% decrease in April.  Even with 3 consecutive months of small declines the large year over year increases to start the year have auction announcements up 43% year to date compared to the first half of the year in 2014. 

Finally we will look at the Foreclosure Deeds.  Deeds are up again in June, though not by as much as we have seen the last few months.  In June 2015 there were 411 deeds recorded this year compared to only 305 filed in June 2014, for an increase of 34.8% over last year’s numbers. 

What Does This Mean For The Market? :

Once again we see deeds going up which will continue to be expected for a long time as the many months of increased petitions are going to finally start to come to completion.  Even with the dip in recorded deeds early in the year they are still up over 20% from the 1st half of last year and I would predict this figure will keep increasing as the year goes on.  Banks are getting more and more inventory which can be a bad sign for seller’s that hope to get top dollar for their houses in the near future.  Prices are already stagnating (and if you look at our local market trend reports many are down, sometimes substantially) though out the region and any meaningful influx of inventory, especially lower priced inventory, could push retail prices down and increase the selling time. 

Conclusion:

Since petitions continue to climb and many of the initial rise from early 2014 are just starting to get through the system.  I would expect even if petitions start to fall off sometime soon (which I do not expect at all…) that completed foreclosures will only increase for at least close to a year just to clear up the huge 16 month influx of now in process foreclosures.  With prices slowing or already dipping in many local markets this long term increase in foreclosure activity might be a strong warning sign that the inevitable market correction might be coming sooner rather than later.

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:

June 2015 Data:  http://www.bankerandtradesman.com/news164893.html

 

Some other useful and interesting resources:

–          Zillow Article pointing out how the Boston Metro was one of the few in the nation that saw stagnant prices since last year, and how 64% of those surveyed overestimated appreciation.

–          Boston.com Article showing a steep increase in homes needing to have price drops and also large increases in sales that fall through.

–          Our most recent Q&A Saturday video where Shaun talks about national and local foreclosure data with some commentary on how they relate and what to expect.

–          Our Real Estate Trends page where you can check out local market reports on about 70 Eastern Massachusetts communities (and about 10 in Southern NH as well) to see what is going on in your own town.

 

 

(Image Credit: foreclosure-newspaper via Brown and Associates Law and Title)

 

 

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