Unlike the rest of the nation, foreclosure activity is rising in Greater Boston
Foreclosure activity in the Greater Boston housing market has risen considerably in the last year, according to the latest numbers from RealtyTrac.
Per RealtyTrac’s analysis, there were 844 instances of foreclosure activity in January, which includes default notices, auctions and REO. That is up 25.57 percent year-over-year and 52.90 percent from Jan. 2014, and places Greater Boston among a minority of U.S. housing markets – of the 50 metro areas RealtyTrac analyzed, only 17 saw foreclosure activity increase.
Here is graph showing the increase in foreclosure activity – click on the circles to compare overall activity and specific aspects of the mortgage market:
Daren Blomquist, the VP of RealtyTrac, explained in comments to Boston Agent that the recent spike in foreclosure activity is due to old loans bubbling to the surface.
“The recent rise in Boston foreclosure activity is caused primarily by a backlog of bad loans still lingering from the housing crisis and just now finally being pushed into the foreclosure pipeline by lenders,” Blomquist said. RealtyTrac data shows that nearly two-thirds (64 percent) of all loans in the foreclosure process in Boston were originated between 2004 and 2008. These bad loans were delayed from being foreclosed because of a combination of sloppy foreclosure procedures on the part of lenders and well-intentioned efforts by the state government to prevent improper foreclosures that had the unintended consequence of prolonging the pain of dealing with these bad loans.”
Everything is Relative
As alarming as those increases appear, it is worth mentioning that foreclosure activity in Greater Boston remains far below its recession-era peaks. According to RealtyTrac’s numbers:
- Overall foreclosure activity is down 83.06 percent from its Jan. 2008 peak.
- From that same period, defaults are down 86.35 percent, while auctions are down 85.33 percent.
- Finally, REOs are down 88.69 percent from their April 2008 peak.
Here is a second graph showing the longer-term trends in foreclosure activity: