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. 25, 2011--- The gradual shift in foreclosure activity away from urban areas into rural and suburban communities is continuing, according toForeclosure Monitor's latest analysis of distressed property data.
In the period from Oct. 2010 to Dec. 31, 2010, Foreclosure Monitor found that the number of distressed units outside Massachusetts' 24 Gateway cities and Boston increased from 51 to 52 percent. This is the second straight quarter that Foreclosure Monitor has found higher rates of distress in suburban and rural areas than in urban areas.
A look at distressed properties by community also illustrates this shift from urban to suburban/rural shift, especially in Worcester County.For the first time since the April 2010 Foreclosure Monitor, Brockton has dropped from the top spot in our table of the municipalities with the most distressed units.
Brockton has seen a 25 percent decline in distressed units from Jan. 1, 2010 to Jan. 1, 2011.There are indications that the foreclosure crisishas peaked in other cities as well, with Chelsea (-25), Fitchburg (-26), Springfield (-28), Lynn (-37) and Lawrence (-43)also seeing declines.
The shift to suburban/rural continues to be felt primarily in Worcester County, where Winchendon (2 percent increase over last year) moved ahead of Brockton in terms of distress, up from eighth. one year ago. Other Worcester County communities seeing spikes in distress rates include Barre (+20), Warren (+27), Blackstone (+27) and Ashburnham (+37).
Of the municipalities ranked as the most distressed in January 2010, Marlborough (-37) has improved its position the most, falling from 18th in January 2010 to 71st in January 2011. Of all municipalities with at least 1,000 housing units, Cambridge had the lowest rate of distress, at 1.5 units per thousand.
Ten of the top 20 communities are located in Worcester County. While a small number of properties can account for large changes in these smaller communities, the pattern of continued distress across Worcester County is a cause for concern that has been further explored recently by the Boston Globe.
Zip codes: Shows rural shift, urban hot spots
The trend away from urban areas is also reflected in the analysis of distressed properties by zip codes. Last year, 17 of the top 20 distressed zip codes were in urban areas. This year, the number has dropped to 12 (as of Jan. 1, 2011).
Zip code analysis also shows that the distressed property problem is especially acute in Worcester County, as nine of the top 20 most distressed zips are here (three urban areas, six suburban/rural).
While the distress may be shifting, zip code analysis shows what urban neighborhoods need attention. In Boston, the overall citywide rate of distress is 10.6 units per thousand housing units, but two zip codes in the Boston's Dorchester neighborhood exceed 25 units/thousand (02122 and 02124).
Overall, the top 20 zip codes show that distress is beginning to level off. There was a decline in distress in 16 of these zip codes, led by a 41 percent decline in Springfield's 01108. Of the four zip codes with an increase in distress, Ashburnham's 01430 had the largest increase, of 37 percent.
Census tract analysis sheds light on urban areas; Springfield improves
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. Boston tracts in Dorchester and Roxbury occupy five of the top 20 tracts, including the most distressed census tract in the state, Roxbury's 090400.
Both Lynn and Worcester contain four of the 20 most distressed census tracts, with three in Brockton, two in Springfield (down from four tracts a year ago), and one each in Lawrence (down from three tracts a year ago) and New Bedford. From one year ago, there has been an increase in distress in 11 of the tracts, declines in eight and one tract has held steady. This mixed outcome highlights that while some of the hardest hit neighborhoods are improving, deterioration continues in other urban neighborhoods.
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 Dec. 2010 foreclosure deed and petition data for Massachusetts, showing a 44 percent decline in the number of foreclosure deeds over Dec. 2009 and a 43 percent decline in the number of foreclosure petitions. While promising news, much of this decline is likely due to the increase of the wait-time between default and the filing of a foreclosure petition from 90 days to 150 days (passed by the Massachusetts legislature in August, 2010), as well as a general slow-down in the foreclosure process due to Massachusetts legal rulings and questions raised about lenders' paperwork. The question about paperwork is a national problem, reflected in RealtyTrac's report that foreclosure activity declined 17 percent nationally from January 2010 to January 2011.
- Real estate sales data: At the end of January, The Warren Group and the Massachusetts Association of Realtors (MAR) reported a five to seven percent increase in single-family home sales volumes and a a six percent decline in median sales prices from Dec. 2009 to Dec. 2010. The change in sales was the first year-over-year increase since June 2010, but the decline in prices sends a mixed signal about the health of the market. S&P/Case-Schiller Price Index shows that housing markets across the country are weak, with only four cities of the 20 measured seeing an increase in home prices from Nov. 2009 to Nov. 2010. These cities include three California cities recovering from very deep price drops, as well as Washington, DC. Of the remaining 16 cities, Boston had the smallest price decline, 0.8 percent.