Foreclosure Activity in Massachusetts – July Still Steadily Rising

Sad Foreclosure - Massachusetts Real Estate

Welcome back to our continuing monthly examination of foreclosure data for Massachusetts.  As we have over seen over the last several months there is a little bit of a pattern developing were we see petitions and foreclosure deeds continue to increase but auctions actually decreasing and this is the case again in July. 

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).

At the end of 2014 when we started tracking this data we were seeing all 3 indicators increase each month from the previous year.  Starting in early 2015 the foreclosure deeds fell year over year and auctions were up huge amounts of around 250% each month.  Since then we started seeing a pattern of deeds going up but auctions are down by a small single digit percentage and are now in the 4th month in a row of this pattern.  Petitions continue to be the only consistent metric now with 17 straight months of increases over the previous year. 

Starting with petitions, as mentioned they have now increased from the previous year for 17 consecutive months.  In July they were up 48.7% from last year with 1044 filed in July 2015 compared to 702 in July of 2014.  As pointed out in some recent months since these have been going up for over a year these increases are on numbers that were up already.  Last July there was a relatively small increase of about 72.5% from July of 2013.  Looking back to July of 2013 there were 407 petitions giving an increase since that time of 156%, which surprisingly is actually a bit less than we saw last month.

The data I have does not usually break down the data past the state level, however this month they did include a very interesting chart showing the year to date increases for each county.  Overall the state’s overall petitions are up 60% through July.  Looking at the counties we focus on we see that most of them are just a little above and a little below this mark.  There was one big exception where Norfolk County was only up 43%, which of course is a still a lot but a bit less than the rest of the state and its surrounding counties.  As for the rest of the other ones we focus on Suffolk County was up 54%, Plymouth County was up 57%, Essex County was up 60%, Bristol County was up 61% and Middlesex County was up 63%.  So overall these areas are pretty close to the state average in general so while the Western Counties are a bit higher they are not skewing things very much in the overall numbers we report each month, which has been a question we have wondered.

Next thing up are the auction announcements.  We mentioned above they are down slightly for the 4th consecutive month with a very minor decline of only a 1.7% decrease with 574 in July 2015 compared to 584 in 2014.  This is actually the smallest change we have seen since this pattern started as the previous 3 months have ranged from 3.2% to 7.5% decreases.  Year to date they do still continue to be up from 2014 by almost 35% even with 4 consecutive months of small declines.    

We will look at the Foreclosure Deeds as the last metric we are tracking.  Deeds are up again in July.  In July 2015 there were 386 deeds recorded compared to only 218 filed in June 2014, for an increase of 77% over last year.  This is back to the sizable increases seen the last few months after a slightly lower increase last month.  For the year to date deeds are up over 27% with 2,416 recorded compared to the 1,897 filed through the end of July of 2015. 

What Does This Mean For The Market? :

As we continue to mention each month, deeds are going up so banks have more inventory.  They might not be releasing it yet, but it is there.  Maybe they will sell large numbers to large intuitional investors and will not affect the retail market that much.  That is certainly a possibility with the homes taken back by large national banks but not as much for smaller local and regional banks, which will have a sizable share of them.  In these cases those house will hit the market at some point. 

Also since petitions continue to increase there is not much reason to think that banks will not continue to take back more properties for at least the next 2 years.  The small decrease the last several months in the number of auction announcements does not really change our thoughts on that.  It is a little surprising that is happening but this is easily the most volatile thing we look at.     

Conclusion:

Since petitions continue to climb each month year over year it is inevitable that banks will be getting more inventory.  Since the foreclosure process will take over a year here, if not much longer, we can expect foreclosure deeds to stay high for at least the next 1.5 to 2+ years.  Once that inventory comes onto the market it will give buyers more options and usually will be priced on the lower side so it will depress prices from both aspects.  Many areas in the greater Boston area and the rest of Eastern MA have already seen price appreciation slow, stop or actually recede.  Do not expect banks to flood the market with houses but at some point it will have to get disposed of. 

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 The Warren Group:

July 2015 Data:  http://www.thewarrengroup.com/2015/09/foreclosure-starts-rise-48-percent-17th-straight-month-of-expansion/

 

 

 

 

(Image Credit: foreclosure_2014 via African History Month Concepts)

 

 

 

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