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.
Rates of foreclosure activity have continued to slow down more in urban areas. For the third consecutive quarter, rural and suburban communities continued to contain the majority of distressed units (52 percent), while the 24 urban "Gateway Cities" and Boston contain 48 percent of distressed units, unchanged from January 2011.
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.
Boston continues to have the highest number of distressed units, even though it does not appear in the top 20. As of April 1, 2011, Boston had 2,856 distressed units, a 25 percent decline from April 2010. Boston is a city of extremes: there are neighborhoods with high levels of distress and neighborhoods with few distressed properties. Overall, Boston ranked 126th of the 293 municipalities with at least 1,000 housing units.
Nine of the top 20 municipalities are in Worcester County, including Ashburnham, Athol, Fitchburg, Gardner, Leicester, North Brookfield, Warren, Winchendon, and Worcester. Statewide, the biggest increases in distress were in Winchendon (16 percent) and Warren (15 percent). The only other double-digit increase in distress was in Plympton (15 percent).
In March, 2011, the US Census Bureau released 2010 Census data for the purpose of redistricting. Up to this point, the Foreclosure Monitor has relied on 2000 Census data on the number of year-round housing units in each community. The 2010 data contains all housing units (regardless of year-round status), and given the rapid changes in the number of units in some communities, it was important to use these updated housing counts. This data is available for municipalities and for Census Tracts, though not for zip codes. As additional data becomes available, the Foreclosure Monitor will update its measurements of distress.
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).
Within Boston, Mattapan's 02126 (15th) and Dorchester's 02124 (19th) remain in the top 20, though this represents an improvement for 02124, where a 31 percent decline in distress contributed in its drop from 9th to 19th. In addition, this is an improvement over April 2010, when there were four Boston zip codes in the top 20.
Overall, of the top 20 zip codes, 14 saw a decline in distress from a year ago, while two remained the same and four saw an increase in distress. Lawrence's 01841 and Springfield's 01108 had the greatest decline in distress (-33 percent), and Taunton's 02718 saw the biggest increase (25 percent). Please note that as the U.S. Census Bureau has yet to release 2010 zip code level, housing unit counts, the rate of distress will continue to rely on 2000 housing unit counts.
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.
As with municipalities, 2010 Census data is now available, allowing us to update the number of housing units in each Census Tract. Both the April 2010 and April 2011 distress rates rely on the 2010 Census data. At the census tract level, all of the 20 most distressed census tracts are in dense, urban areas.
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.
From one year ago, there has been an increase in distress in two of the top 20 tracts, no change in two tracts and declines in 16 tracts. These declines provide hope that the worst is over for the hardest hit urban neighborhoods, but improvement is uneven, with greater overall improvement in Springfield, for example, than in Brockton or Lynn.
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 April 2011 foreclosure deed and petition data for Massachusetts, showing a 62 percent decline in the number of foreclosure deeds over April 2010 and a 51 percent decline in the number of foreclosure petitions. Nationally, foreclosure activity (as reported by RealtyTrac) was down 34 percent from April 2010 to April 2011.
Real estate sales data: At the end of May, The Warren Group and the Massachusetts Association of Realtors (MAR) reported a four to five percent decline in median prices for single-family homes from April 2010 to April 2011, sending signals that the housing market continues to be weak.
S&P/Case-Schiller Price Index shows that housing markets across the country are weak, with annual price declines from March 2010 to March 2011 in every metro measured. Boston fared better than all of the cities except Detroit, Los Angeles and Dallas, with a 2.7 percent decline in sales prices.