MA Foreclosure Starts Up 35 Percent in 2012
Tuesday, January 29, 2013
Despite the sizable increase in foreclosure starts, however, the number of completed foreclosures decreased by nearly 13 percent last year to 7,424, compared to 8,531 in 2011.
"Foreclosure activity nationwide is declining, and Massachusetts is following the same path," said Timothy M. Warren Jr., CEO of The Warren Group. "Deeds were down for the year, petitions declined for the past two months and I think that will continue."
The Warren Group said that petition levels were decreased dramatically for much of 2011 as banks slowed down foreclosure processes.
The overall share of the housing market represented by properties that had been foreclosed on also decreased last year. In 2012, 3.4 percent of single-family home sales statewide were bank-owned properties, down from 3.8 percent in 2011. Bank-owned property sales of condominiums accounted for 2.6 percent of all condo sales in the Commonwealth in 2012, down from 3.5 percent of all condo sales in 2011.
"Foreclosures have been trending down for several years now," said Warren. "A robust real estate market will ensure that this trend continues in 2013."
Bankruptcies on the Wane
A decrease of nearly 19 percent in personal bankruptcy filings may be related to the drop in completed foreclosures. In 2012, 11,964 Bay Staters filed for Chapter 7 bankruptcies, down from the 14,716 filed in 2011.
“The drop in bankruptcy filings is an encouraging sign; it indicates that consumers are more optimistic about their ability to pay off debt and clean up their financial situations,” said Warren.
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 made it more difficult for households to file for Chapter 7 bankruptcy, which would discharge credit card bills and other unsecured debts and accounted for more than 74 percent of bankruptcy filings in the Commonwealth last year, freeing up income to continue to pay secured debts like mortgages. The reforms took the option of filing for bankruptcy to save one's home off the table for many distressed borrowers.
Home Sales Highest Since 2006
Meanwhile, Bay State home sales picked up speed in 2012, reaching their highest levels in six years. Statewide, home sales rose more than 18 percent to 46,887, up from 39,594 in 2011 and the highest number of annual sales recorded statewide since the 50,724 sales of 2006.
Median prices for single-family homes also increased to $300,000 in December, a gain of more than 12 percent over the $267,250 median home price of December 2011.
RE/MAX of New England issued a positive outlook for the region earlier this month in its 2013 Housing Forecast, with all six states posting year-over-year increases in home sales in 2012.
“As the amount of available inventory continues to shrink, watch for a gradual appreciation in median home prices in the second half of 2013 as the market begins to shift from a buyer’s market to a balanced market which favors both the buyer and the seller," said Dan Breault, Executive Vice President and Regional Director of RE/MAX of New England.
- Timeline: The Steps Leading to the Foreclosure Crisis
- Why Worcester County Foreclosures Have Skyrocketed
- Worcester County Leads State With 468 Foreclosures In July
- Investigation: 5 Banks Accused of Fraudulent Foreclosures in MA
- Grace Ross: Foreclosure Crisis No Where Near Over