Foreclosure Activity in Massachusetts – Everything Up in August

LaFyette Abandoned and Dilapidated House - MA 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.  Not the case in August as everything is back on the rise.   

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).

Over the last several months we have seen a pattern where both petitions and deeds have been up but auctions have been down.  Not in August as all 3 metrics are back to being up.  Granted the auctions are only up a very small amount making it look like they might just be bouncing around a flat rate year over year in recent months.

Starting with petitions they have now increased from the previous year for 18 consecutive months.  In August they were up 33.4% from last year with 959 filed in August 2015 compared to 719 in August 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 August there was a relatively small increase of about 67% from August of 2013.  Looking back to August of 2013 there were 430 petitions giving an increase since that time of 123%, which is actually less than many other months we have seen.  Year to date through August petitions are up 56.2% over the same time period in 2013.

Next thing to look at are the auction announcements.  Above we mentioned they had been down slightly for the last 4 months with very minor declines of only 1.7% to 7.5% decreases.  This month they are back up from the previous year going up 3.3% from August of 2014 with 530 auctions announced this month and 513 last year.  Year to date they do still continue to be up from 2014 by 30.8% even with 4 consecutive months of small declines and only a tiny increase this month, thanks to the huge ~250% increases seen in January 2015 and February 2015.    

Finally we will look at the Foreclosure Deeds as the last metric we are tracking.  Deeds are up once again in August.  In August 2015 there were 383 deeds recorded compared to 347 filed in August 2014, for an increase of 10.4% over last year.  This is a bit smaller than most of the other months this year but still continuing the trend.  For the year to date deeds are up over 24.7%. 

What Does This Mean For The Market? :

As we have been mentioning each month, deeds are going up so banks will be getting more inventory.  They might not be releasing it yet, but it is there.  Larger regional and national banks might sell large “tapes” of REO properties to intuitional investors and will not affect the retail market that much.  However this is not likely with smaller local banks that will have a large portion of these new foreclosures.  Again we have mentioned over the last several months 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 or so. 

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:

August 2015 Data:  http://www.thewarrengroup.com/2015/10/foreclosure-starts-rise-33-percent-in-august-18th-straight-monthly-increase/

 

 

 

 

 

(Image Credit: LaFayette House via timesfreepress.com)

 

 

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