Real estate industry pundits can argue about the reasons why, but there isn't any denying that the foreclosure crisis that gripped Boston for several years ended in 2013.
Lenders initiated 230 foreclosure petitions – the first step in the foreclosure process in Massachusetts – in 2013 compared to 890 foreclosure petitions in 2012, a decline of 74.15
Lenders completed (the recording of a foreclosure deed) less than 100 foreclosures in 2013. That compares to more than 1,200 in 2008, a more than 90 percent decline. The Globe obtained the Boston foreclosure data from City of Boston officials.
Statewide a total of 4,174 foreclosure petitions were initiated through the first nine months of 2013, a 70 percent decline from 13,876 petitions filed during the same period last year, according to The Warren Group, publisher of Banker & Tradesman. A total of 1,281 foreclosure petitions were filed in the third quarter, down more than 71 percent from the third quarter of 2012 when there were 4,451 petitions filed. Foreclosure deeds declined 69 percent through September 2013 compared to the first three quarters of 2012.
The sharp increase in home prices over the last 12 months certainly has helped end the wave of foreclosures. As home values increased, distressed homeowners were able to sell their properties at prices that cover their mortgages and avoid the foreclosure process.
The S&P/Case-Shiller Home Price Indices reported December 31, 2013 that Boston area home prices increased 8.6 percent in October compared to October 2012. The Case-Shiller index tracks existing home sales in 20 metropolitan areas around the United States. In Boston, the median price for a home is $426,000, up 11 percent from $383,000, according to The Globe story.
Massachusetts now requires lenders to notify homeowners that they have a right to seek a loan modification before losing their home to foreclosure. As a result of Massachusetts and federal court cases and other regulations, lenders also have been much more diligent about having all their paperwork in order before proceeding with a foreclosure. These changes have slowed the foreclosure process.
A slight increase in foreclosure activity in the coming months wouldn't be a big surprise now that lenders have a better handle on new laws and regulations, but given the tight real estate inventory environment around the Greater Boston Area those foreclosured properties likely will sell quickly.