Lawrence, Chelsea, Lowell among cities showing declines
By Tim H. Davis
BOSTON, June 10, 2011 --- Foreclosure activity has continued to shift away from urban areas, with Lawrence, Chelsea, Lowell and New Bedford all seeing significant declines compared to the first quarter of last year.
In its quarterly look at distressed property levels, Foreclosure Monitor found that the number of housing units in distress dropped 14 percent in Massachusetts from April 1, 2010 to April 1, 2011. This slowdown was due in part to the so-called "robo-signing" scandal in which lenders were found to have signed thousands of documents with little attention to legal requirements.
In measuring distress by communities, the largest declines from April 2010 to April 2011 were in Lawrence and Chelsea (31 percent each). Lowell saw a 20 percent decline and dropped from 15th to 32nd place. New Bedford saw a 21 percent decline and dropped from 18th to 37th. And although Brockton retook its position as the most distressed community in Massachusetts after dropping out of that spot last quarter, it still showed a 17 percent decline in the rate of distress since April, 2010.
At zip code level, Worcester County areas lead the top 20
Templeton's 01468 continues to have the highest rate of distress in the state, although it declined 12 percent from a year ago. Brockton's 02302 (2nd) and 02301 (5th) are the most distressed urban zip codes in the state.
Zip code analysis also shows that the distressed property problem remains acute in Worcester County, as nine of the top 20 most distressed zips are here (four urban areas, five suburban/rural). This is unchanged from January 2011, but up from five in April 2010 (only one of these five was rural/suburban and the other four were urban).
Census tract: Lawrence, Springfieldimprove
While the number of housing units in a zip code can range from dozens to more than 20,000, the number of units in a census tract generally ranges from a 1,000 to 3,000, providing a smaller area for analysis.
Brockton continues to suffer from high foreclosure distress, with six of the 20 hardest hit Census Tracts, up from five the previous year. While Brockton's 510400 had the highest rate of distress in April 2010, another Brockton tract, 511000, leads the list for April 2011.
Boston tracts in Dorchester and Mattapan occupy four of the top 20 tracts, down from five a year ago. Lynn also contains four of the most distressed tracts, up from one a year ago. Worcester has three tracts in the top 20 (up from two a year ago), followed by Springfield with two (down from five a year ago) and Lowell with one.
In addition to the reduction in distress in Springfield, the April 2011 data is good news for Lawrence, which had two Census Tracts in the top 20 in April 2010 and none in April 2011.
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State's housing market stronger than most; foreclosure impacts delayed
(Foreclosure Monitor is an effort by MHP to help public officials determine how best to use their resources to help homeowners and neighborhoods hard-hit by foreclosure).
By Tim H. Davis
BOSTON, August8, 2011- While the number of units in distresshas declined from a year ago, indications are that this may only be a trough and that foreclosures are likely to increase in the third quarter.
Foreclosure Monitor's quarterly analysis of Warren Group data shows that the number of housing units in distress has declined 14 percent in Massachusetts from July 1, 2010 to July 1, 2011. However, as explained in the June Foreclosure Monitor, this slowdown is likely due to lenders slowing down their foreclosure activity in the wake of the "robo-signing" scandal.
Further analysis of Warren Group data indicates that the lender slowdown may have bottomed out as the number of distressed units increased 0.7 percent from April 1, 2011 to July 1, 2011. Additionally, while the Warren Group has not published June 2011 foreclosure petition data yet, our own analysis suggests a dramatic increase in foreclosure activity from May to June. This trend is supported by news that lenders are beginning to reach agreements with investors that will allow the lenders to more aggressively address mortgage defaults.
At the same time, Attorney General Martha Coakley's investigation of a powerful Virginia-based mortgage registration company continues to raise questions about the validity of mortgage and foreclosure paperwork. This could temper future foreclosure activity, just as the "robo-signing" scandal did.For the moment however, the slowdown means that communities that were once "ground zero" locations for foreclosure activity have seen significant slowdowns.
Communities: Chelsea, Lawrence, Lynn see significant declines
The largest declines in the top 20 municipalities from July 2010 to July 2011 were in Chelsea (-36 percent), Lawrence and Lynn (-23 percent each). The decline in Chelsea was significant enough to drop it from fifth most distressed in July 2010 to 21st in July 2011. Fitchburg and Springfield also had substantial declines (-22 percent and -20 percent respectively). Brockton continues to have the highest level of distress, despite a 14 percent decline since July 2010.
Boston continues to have the highest number of distressed units, even though it does not appear in the top 20. As of July 1, 2011, Boston had 2,828 distressed units, a 24 percent decline from July 2010. Boston is a city of extremes: there are neighborhoods with high levels of distress and neighborhoods with few distressed properties. Overall, Boston ranked 130th of the 293 municipalities with at least 1,000 housing units.
At zip code level, Worcester County areas again lead the top 20
From April 2011 to July 2011, Brockton's 02302 overtook Templeton's 01468 as the most distressed zip code in the state. Brockton's 02302 did not see an increase in distress, but its eight percent decline in distress was less than the encouraging 27 percent decline in Templeton.
Zip code analysis also shows that the distressed property problem remains acute in Worcester County, as eight of the top 20 most distressed zips are here, down from nine in April (four are in Worcester and four are in suburban/rural areas).
Springfield contains three of the most distressed zip codes, though there was improvement in all three; a 26 percent decline in 01108, a 20 percent decline in 01109 and a 15 percent decline in 01151.
Within Boston, Dorchester's 02121 (16th) and Mattapan's 02126 (20th) made the top 20, but both had a 22 percent decline in distress from July 2010 to July 2011. Overall, of the top 20 zip codes, 17 saw a decline in distress from a year ago.
Census Tract: Lawrence, Springfield improve
While the number of housing units in a zip code can range from dozens to more than 20,000, the number of units in a census tract generally ranges from a 1,000 to 3,000, providing a smaller area for analysis.
At the census tract level, all of the 20 most distressed census tracts are in dense, urban areas. As of July 1, 2011, Worcester's tract 733000 had the highest rate of distressed units, with a 20 percent increase over a year ago. Two other Worcester census tracts are in the top 20.
Brockton continues to suffer from high rates of distress, with five of the 20 hardest hit Census Tracts, down from six the previous year. In good news, Brockton's 510400 had the highest rate of distress in July 2010, but the rate of distress declined 35 percent over the year, dropping the tract to 4th place in July 2011.
Boston tracts occupy four of the top 20 tracts, unchanged from a year ago, though the specific tracts have changed. The most dramatic reversals were Roxbury's tract 092300, which had a 56 percent decline in distress, dropping it from 2nd place to 67th place, and Mattapan's tract 100300, which had a 16 percent increase in distress and moved from 55th place to 14th place. Lynn and Springfield have three tracts in the top 20 (unchanged from a year ago) and Lowell has one.
From one year ago, there has been an increase in distress in six of the top 20 tracts and declines in 14 tracts. Despite these declines, distress is still high in urban neighborhoods, though the gap between the worst census tract and statewide rate of distress has narrowed; in July 2010, the most distressed census tract had a rate of distress that was 5.6 times the statewide rate. In July 2011, the most distressed census tract had a rate of distress that was 4.4 times the statewide rate.
For more information
The following links are provided for readers to directly access regular sources of foreclosure and real estate trends, some of which are mentioned in the proceeding analysis:
Foreclosure data: The Warren Group released May 2011 foreclosure deed and petition data for Massachusetts, showing a 65 percent decline in the number of foreclosure deeds over May 2010 and a 67 percent decline in the number of foreclosure petitions. Nationally, foreclosure activity (as reported by RealtyTrac) was down 29 percent from June 2010 to June 2011, though up four percent from May 2011. Lenders' foreclosure processes have been slowed since problems with foreclosure documents were brought to light in fall 2010.
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All signs point to increase in activity
(Foreclosure Monitor is an effort by MHP to help public officials determine how best to use their resources to help homeowners and neighborhoods hard-hit by foreclosure).
By Tim H. Davis
BOSTON, Nov. 7, 2011--- While foreclosure distress appears to have declined since a year ago, recent increases in foreclosure activity signal that foreclosure distress is set to increase throughout the rest of 2011 and into 2012.
Foreclosure Monitor's quarterly analysis of Warren Group data shows that the number of housing units in distress has declined 29 percent in Massachusetts from Oct. 1, 2010 to Oct. 1, 2011. However, as explained in the June Foreclosure Monitor, this decline is due to lenders slowing their foreclosure activity in the wake of the "robo-signing" scandal. Lenders appear to be resuming the foreclosure process, as petitions in Sept. 2011 were 67 percent higher than the low of 699 in May 2011.
Problems still persist for lenders attempting to foreclose, despite the recent news that states and lenders were nearing a deal that would provide the largest lenders legal relief in exchange for a cash settlement and refinancing mortgages of underwater borrowers. In addition, a number of completed foreclosures may be in legal limbo due to the recent "Belivacqua" ruling by the Massachusetts Supreme Judicial Court.
Broad efforts to resolve the foreclosure morass at the federal level don't appear forthcoming, but tools are needed to resolve both the economic difficulties of distressed homeowners and the legal/financial binds that lenders have in completing foreclosures.
Communities: Chelsea, Lawrence, Lynn see significant declines
The largest declines in the top 20 municipalities from Oct. 2010 to Oct. 2011 were in Chelsea (-49 percent), Everett (-41 percent), Leicester (-40 percent), Carver (-39 percent) and Revere (-37 percent).
As a result, all of these cities are no longer in the top 20 as of Oct. 2011. Of the cities that remain, Lynn had the largest decline in distress (-36 percent), dropping from the second most distressed in Oct. 2010 to the seventh in Oct. 2011. Despite a 29 percent decline in distress in Brockton, it remains the most distressed municipality in Massachusetts.
Boston ranked 140th of the 293 municipalities with at least 1,000 housing units in terms of distress, but had the highest number of distressed units due to its sheer size. As of Oct. 1, 2011, Boston had 2,519 distressed units, a 35 percent decline from last year.
Worcester had the second highest number of distressed units (1,482), closely followed by Springfield (1,459). Brockton, with 1,068 distressed units, had the fourth highest number of distressed units.
Eleven of the top 20 municipalities are in Worcester County. Among the top 20, there was an increase in distress in only one municipality --- the small Plymouth County community of Plympton, with a 12 percent increase in distress.
The rate of distress continues to rise in suburban and rural communities as compared to Boston and the state's 24 Gateway cities. One year ago, Foreclosure Monitor reported that for the first time, there was more distress in suburban/rural communities (50.6 percent) than in urban areas (49.4 percent). That gap has now widened, with 52.1 percent of the distress in suburban/rural communities and 47.9 percent in the Boston/Gateway cities.
Here's how this shift has evolved since 2008:
10/1/2008
Gateway Cities & Boston - 58.7 percent
Remainder of state - 41.3 percent
10/1/2009
Gateway Cities & Boston - 54.3 percent
Remainder of state - 45.7 percent
10/1/2010
Gateway Cities & Boston - 49.4 percent
Remainder of state - 50.6 percent
10/1/2011
Gateway Cities & Boston - 47.9 percent
Remainder of state - 52.1 percent
Zip codes:Despite easing, Worcester County areas lead top 20
From July 2011 to October 2011, Templeton re-took the top spot on the list of most distressed zip codes. Brockton's 02302 was the most distressed zip code in July
In what may be a sign of mild improvement, seven of the top 20 most distressed zip codes are in Worcester County, down from eight in July and nine in April (four are in Worcester and three are in suburban/rural areas).
Census Tract: Brockton continues to have the highest levels of distress
While the number of housing units in a zip code can range from dozens to more than 20,000, the number of units in a census tract generally ranges from a 1,000 to 3,000, providing a smaller area of analysis that shows us where the high levels of distress are in urban neighborhoods.
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Foreclosure activity slow to resume
(Foreclosure Monitor is an effort by MHP to help public officials determine how best to use their resources to help homeowners and neighborhoods hard-hit by foreclosure).
By Tim H. Davis
BOSTON, Feb 27, 2012--- Despite predictions that foreclosure activities would increase once lenders put various legal challenges behind them, foreclosure distress has declined since a year ago and remains at less than half of what it was during its peak in 2010.Foreclosure Monitor's quarterly analysis of Warren Group data shows that the number of housing units in distress declined 8.6 percent in Massachusetts from Jan. 1, 2011 to Jan. 1, 2012, and 6.0 percent from our last report in October.
As Foreclosure Monitor explained last June, lenders slowed down their activities in the first half of last year due to the "robo-signing" scandal. When foreclosure petitions spiked 106 percent from May to July, it appeared that lenders had resumed activities. That proved not to be the case as the average number of petitions filed in the last four months of 2011 was 1,095, a 44 percent drop from June-Sept. 2010, the four-month period just before the robo-signing scandal became national news.
Reasonsvary on why the slowdown has continued. Lack of lender capacity to process foreclosures and address title problems may be one reason. Another reason could be that the nation's top mortgage lenders have been waiting for a settlement with the U.S. government over charges of widespread mortgage fraud (a $25 billion settlement was announced earlier this month).
In Massachusetts, an improving economic picture may also be a factor. As of Dec. 2011, unemployment in Massachusetts stood at 6.8 percent, lower than the national rate of 8.5 percent. In addition, in its latest report, Lender Processing Services, Inc. found that 10.2 percent of Massachusetts mortgages were non-current (delinquent or in the foreclosure process) as of Dec. 2011, down 3.5 percent from 2010 and below the national rate of 12.3 percent. Even with an improving economy, the backlog of properties remains significant. Unless lenders increase their activity, it will take years for all the foreclosures to work through the system and for the real estate market to recover.
Communities: Springfield distress increase & other trends
While the rate of distress continues to be higher in suburban/rural communities than in Boston and the state's 24 Gateway cities, the shift appears to be stabilizing and two cities are showing renewed foreclosure activity from one year ago.
Back in Oct. 2010, Foreclosure Monitor reported that for the first time, suburban/rural communities had a higher rate of distress than cities (50.6 to 49.4 percent). That gap has widened over the last 15 months to 52.3-47.7 as of Jan. 1, 2012. However, the shift appears to be stabilizing as thepercentage of distress in cities is down 0.2 percent from Oct. 2011.
What is concerning is that while most Massachusetts cities are showing year-over-year declines, Fitchburg (5.6 percent) and Springfield (4.8 percent) are showing increases. Given the long-term distress experienced in both communities, this is a worrisome trend.
In terms of Springfield, while the June 1 tornado caused damage to some 800 properties and did hit some areas with high levels of foreclosure, much of the tornado's track was in non-residential areas and areas where foreclosures were relatively few. While one cannot discount the tornado's impact on the real estate market, recent increases in foreclosure activity has largely been in neighborhoods that were not in the tornado's path.
This is the 12th consecutive quarter that Foreclosure Monitor has analyzed foreclosure data from The Warren Group by community, zip code and census tract. Through this research, we see some clear patterns emerging that are affecting three different types of regions/communities:
Low income, urban communities: Distress remains high due to weak local demand and the hangover from the sub-prime loan crises. Within this category, there are two types of communities; stable regional markets (e.g., Dorchester and Chelsea within Greater Boston) that will recover more quickly and weaker regional markets (e.g., Springfield and Fitchburg) that will take longer to recover.
Worcester County: Foreclosure activity remains high in both urban and rural areas. More research is needed to identify the problems in Worcester County, but my theory is that given the affordability of Worcester County compared to closer-in communities to Boston and the high-tech suburbs on both Route 128 (I-95) and I-495, the excess demand in the regional market flowed towards Worcester County. With overall regional (Greater Boston) demand down, current buyers are able to purchase closer to job sources, leaving Worcester County with weakened demand.
Southeastern Massachusetts: The concentration of top 20 towns in Plymouth County highlights the high levels of distress in this part of Massachusetts, though it is not limited to Plymouth County. High levels of distress can be found in adjacent towns in Bristol and Norfolk Counties. The weak market in Southeastern Massachusetts may be similar to the problems encountered in Worcester County. Until total demand increases in the Greater Boston region, Southeastern Massachusetts may continue to suffer.
Here are some other highlights from our latest community analysis:
Cities showing strong year-over-year percentage declines include Lynn (-19.4), Everett (-23 percent) and Revere (-21 percent).
Boston ranked 144th of the 293 municipalities in its rate of distress, but had the highest number of distressed units due to its sheer size. As of Jan. 1, 2012, Boston had 2,303 distressed units, an 18.9 percent decline from last year.
In a change from the third quarter of 2011, Springfield has passed Worcester and now has the second-highest number of distressed units (1,401 units) in the state, followed by Worcester (1,355 units) and Brockton (1,000).
Zip codes:Worcester County zip codes improve
The US Census Bureau has released 2010 Census data for zip codes. As a result, the distress rates for this report (and going forward) will be based on updated housing counts. Census tract and municipal data was released previously and have been used for previous reports. For the second quarter, Templeton's 01436 remained the most distressed zip code in Massachusetts. Brockton's 02302 was the most distressed zip code in July.
Census Tract: Top 20 most distressed in just six cities
While the number of housing units in a zip code can range from dozens to more than 20,000, the number of units in a census tract generally ranges from a 1,000 to 3,000, providing a smaller area of analysis that shows us where the high levels of distress are in urban neighborhoods.
For the second quarter in a row, Worcester's tract 7324 has the highest rate of distressed units, with a 12.5 percent increase in distress over January 1, 2011. Worcester's tract 7319 also placed in the top 20, at number three, though this tract had a 2.2 percent decline over the year. Brockton has six of the 20 hardest hit census tracts (the same number as Oct. 2011), though four of these tracts had a decline in distress from the year before.
Springfield and Lynn had four tracts each in the top 20 while two each were located in New Bedford and the Mattapan section of Boston. The biggest increase in distress was New Bedford's tract 6511, where distress increased 68 percent since a year ago, bringing this tract from 140th to 12th. While it is not immediately clear the reasons for this increase in distress, 23 percent of the distressed units in this tract are located on one short section of Weld Street.