Analysts say figures are encouraging but warn crisis isn’t over
The number of foreclosures in Massachusetts dropped more than 25 percent last year compared with 2008, to 9,269 from 12,430, according to data released yesterday by Warren Group, a company that tracks local real estate.
But the state’s foreclosure crisis is far from over, many economists and housing advocates agree. Nearly 28,000 homeowners last year were slammed with foreclosure petitions, the first step in the process, representing a 28.1 percent jump from the year before, Warren Group said. That means more people had trouble making their mortgage payments.
In addition, a small but increasing number of foreclosed homes in affluent communities, including Concord, Winchester, and Weston, reflects how even some of the state’s highest-paid residents are becoming financially crippled because of the recession. Indeed, the costly island of Nantucket experienced the steepest percent increase in foreclosure deeds in Massachusetts - a 733 percent rise - from three in 2008 to 25 in 2009, according to Warren Group.
“The good news is that not as many homeowners lost their homes to foreclosure in 2009 as they did the prior year,’’ said Timothy M. Warren Jr., chief executive of Warren Group. “The bad news is that more people faced foreclosure, as they struggled with unemployment and other economic hardships.’’
Foreclosure data for December largely mirrored year-end statistics. The number of foreclosure petitions swelled to 2,060 during the month, a 26.8 percent increase from the same period in 2008. But the number of homes taken back by lenders in December - 857 - represented an 8.4 percent drop from the same month in 2008.
The decrease in foreclosure deeds, the final step in the process, is partly because of a Massachusetts Land Court decision last year that has prompted lenders to slow the process so they can clean up faulty paperwork. Others say lenders are increasingly helping distressed homeowners modify their loans to more affordable payments, even if it only postpones a foreclosure.
There are mixed opinions on what 2010 will bring for the region’s housing market. Paul Willen, senior economist and policy adviser for the Federal Reserve Bank of Boston, said many of the most vulnerable homeowners already have lost their homes and the market appears to be stabilizing. But he worries about high unemployment rates and homeowners who are “underwater,’’ living in properties that are worth less than what they owe on their mortgages.
Others see opportunity coming out of the foreclosure crisis, which is depressing home values across the state. Annette Norton, a broker/owner of RE/MAX Best Choice in Framingham, said foreclosures in more affluent neighborhoods could help buyers who were once priced out of the high-end market now get into more expensive homes. “I’m just starting to see properties in foreclosure in the $800,000 to $1,000,000 range,’’ Norton said. “We haven’t really seen high-end foreclosures in Massachusetts in the past.’’
By Jenifer B. McKim for Boston globe January 22, 2010