By Tim H. Davis
(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).
BOSTON, Feb. 20, 2013 --- While many key indicators show that the housing market is recovering, Foreclosure Monitor's quarterly analysis of foreclosures at the community and neighborhood level indicates what areas are still suffering from property distress.
This edition of Foreclosure Monitor is substituting its usual statewide analysis of distress by community, zip code and census tract and will instead break down distress by gateway community census tracts, City of Boston census tracts and suburban/rural/higher-income urban communities. This is being done to give policy makers and local leaders a different look at what areas are still struggling relative to the state as a whole.
Overall, the statewide picture is one of recovery. Among the positive indicators are:
Increase in both home sales and median sales prices from 2011 to 2012
Seven months of decline in the number of completed foreclosures (foreclosure deeds)
Foreclosure petitions have been down in three of the last four months.
Five months of decline in the number of auction announcements
Fewer petitions are becoming bank owned properties, as lenders turn to short sales as their preferred method of resolution. In Q4 2012, 65 percent of the resolutions were short sales.
As a result, foreclosure distress has declined 4.2 percent since a year ago, to 9.5 units per 1,000 housing units, with a steep decline in bank owned properties (-26 percent). Note that Foreclosure Monitor defines distressed properties as all those properties where a foreclosure petition has been filed or an auction scheduled in the previous year, or are bank held (up to two years).
Gateway cities continue to be hit hard
Massachusetts' 24 so-called gateway cities continue to suffer an inordinate amount of distress relative to the state as a whole. While these 24 communities represent just 25 percent of the state's housing units, they account for 39 percent of the state's foreclosure distress and have an overall distress rate that is 54 percent higher than the state's.
Brockton and Springfield had the highest levels of foreclosure distress as of Jan. 1, 2013, both among the gateway communities and all Massachusetts municipalities. Here are some other facts about distress levels in the state's gateway cities:
Nineteen of the 24 communities had distress rates greater than for the state as a whole
The eight most distressed gateway cities also ranked in the top 30 most distressed Massachusetts municipalities
Foreclosure distress declined in 16 gateway communities between Jan. 2012 and Jan. 2013, but increased in eight
The greatest increase in distress was in Westfield (23.8 percent), and the greatest decline was in Malden (-25 percent).
Gateway city census tracts show hot spots
Since the number of housing units in each gateway city can vary dramatically, it's useful to analyze distress by census tracts, which generally range from 1,000 to 3,000 units. This helps provide state and local leaders with a better idea of exactly where property distress and neighborhood destabilization may be occurring and where public resources and efforts like receivership and first-time homebuyer programs may have the most impact.
According to our analysis as of Jan. 1, 2013, the 30 most distressed census tracts in the state's gateway cities were confined to just seven cities. Twenty-seven of these tracts were among the state's 30 most distressed census tracts.
Among the facts this chart shows are:
Brockton had the highest number of census tracts (12), up from 11 tracts the year before. Springfield contained eight of the top 30 tracts both in Jan. 2012 and in Jan. 2013
The other five gateway communities with census tracts in the top 30 were New Bedford (3), Worcester (3), Lynn (2), Fitchburg (one), and Lawrence (one)
The biggest increase in distress was Springfield's tract 8014.01, where distress increased 48.4 percent since a year ago. Brockton's tract 5102 was next, with a 42.2 percent increase. The biggest decline in distress was in Worcester's tract 7324 (-23.1 percent).
Boston: Overall distress rate less than state
The overall distress rate in Boston as of Jan. 1, 2013 was 7.2 units per 1,000 housing units, below the statewide rate of 9.5 per 1,000 units. Compared to a year ago, Boston's distress rate has declined by a healthy decline of 15.4 percent. Despite this decline in distress, there are neighborhoods to watch, and, with 1,948 units in foreclosure distress, Boston has more such units than any other Massachusetts city.
Foreclosures are concentrated in the neighborhoods of Dorchester, Roxbury, Mattapan, and Hyde Park, with a smaller concentration in East Boston. The map below highlights this concentration, with the 15 most distressed tracts in the darkest color.
Table 3 below provides detailed information on the 30 most distressed tracts in Boston. By planning district, the breakdown of these tracts by neighborhood was: nine tracts in Dorchester, six tracts each in Hyde Park, Mattapan, and Roxbury, two in East Boston, and one in Roslindale.
Roxbury's tract 904 was the most distressed Boston tract in Jan. 2013, though it ranked 15th a year ago. Given the small size of a census tract, a small increase in the number of distressed properties can lead to a large increase in the distress rate. In addition to this tract, only Mattapan's 1011.02 was in the statewide list of top 30 distressed census tracts.
Distress in suburban/rural/higher-income urban communities
While the Foreclosure Monitor focuses on Massachusetts' most distressed urban neighborhoods, it is also important to note areas of distress elsewhere in the state, both in less urban areas (municipalities with a population of less than 35,000), and among Massachusetts' larger urban municipalities with higher median household incomes such as Arlington, Newton and Weymouth, Cambridge and Somerville.
Back in Oct. 2010, Foreclosure Monitor reported that for the first time, suburban/rural/higher-income urban communities had a higher percentage of the state's distressed units than the urban gateway communities and Boston (50.6 to 49.4 percent). That gap continued to widen slowly until July 2012, to 53.8-46.2 percent. Over the last six months, the percent of the state's distressed units in suburban/rural/higher-income urban communities has remained relatively stable, and were 53.9 percent of all distressed units in Massachusetts as of Jan.1, 2013.
Of these suburban/rural/higher-income urban municipalities, the 30 most distressed are presented in Table 4, below. Of these top 30 most distressed, 22 had an increase in distress from Jan. 1, 2012 to Jan. 1, 2013. Distress declined in the remaining eight communities. Overall, distress declined 1.3 percent in these communities, compared to a statewide decline of 4.2 percent.
Highlights from these suburban/rural/higher-income urban communities include:
Winchendon had the highest level of distress, at 21.9 units per 1,000 housing units (a 1.1 percent increase from one year ago)
Of these top 30 most distressed, Plymouth is the largest municipality, followed by Attleboro
The number of Worcester County communities in the top 30 remained steady at 13 in both Jan. 2012 and 2013. The number of Plymouth County communities increased from six to eight over the same period
Of the larger communities, Cambridge and Brookline had the lowest rate of distress (1.3 units per 1,000 housing units).
Other trends in real estate, foreclosures
The following links are provided for readers to directly access regular sources of foreclosure and real estate trends:
Foreclosure data: The Warren Group most recently released foreclosure data for the month of December 2012. The number of foreclosure deeds filed in Dec. 2012 (265) was 65 percent lower than the 758 filed in Dec. 2011. This year-over-year decline was the seventh straight month of decline. Foreclosure petitions (the first step in the legal process to complete a foreclosure) also declined from Dec. 2011 to Dec. 2012 (17 percent). In addition, over the entirety of 2012, the number of foreclosure deeds declined 13 percent in Massachusetts. The number of foreclosure petitions increased 36 percent from 2011 to 2012, but more recent, monthly trends have been downward. Nationally, foreclosure activity (as reported by RealtyTrac) declined 10 percent from Nov. 2012 to Dec. 2012 (with the lowest level of foreclosure activity of any month since April 2007), and a three percent decline for all of 2012, compared to 2011.
Real estate sales data: The Warren Group and the Massachusetts Association of Realtors (MAR) recently released their monthly real estate sales figures. The two use somewhat different data sets for analysis. The Warren Group reported an 8.2 percent increase in the number of single family sales from Dec. 2011 to Dec. 2012, and a 12.3 percent increase in median single family sales prices, while the Mass. Association of Realtors reported a 13.0 percent increase in single family sales and a 10.4 percent increase in median single family sales prices. Both the Warren Group and MAR also reported annual increases in sales volume and median sales prices from 2011 to 2012.
The S&P/Case-Schiller Price Index recently released its Nov. 2012 data. Prices continue to rise nationally, at a 5.5 percent increase from Nov. 2011 to Nov. 2012 for its 20-city composite. Prices also increased in Greater Boston 2.3 percent, placing Boston 17th of the 20 cities measured. The biggest annual price increases were in Phoenix (22.8 percent) and San Francisco (12.7 percent). Prices declined in only one city: New York (-1.2 percent). Boston prices (seasonally adjusted) are currently only three percent higher than the market low of April 2009, and remain 15 percent below the market peak of Nov. 2005.