Merrimack Valley University of Massachusetts Lowell housingreport An e-publication of UMass Lowell and the Middlesex North Registry of Deeds MIDDLESEX NORTH REGISTRY OF DEEDS NORTHERN ESSEX REGISTRY OF DEEDS Volume 10, Issue 1 January 2017 Numbers in the Four Cities: 2015 v. 2016...1-2 2016 Real Estate Review...3-4 Numbers in the Four Cities: 2015 v. 2016 By Syeda Nizami In 2016, the number of orders of notice (foreclosure petitions) filed increased in three of the cities when compared to 2015, but this trend has leveled off during the last few months. Methuen saw a significant 58% increase in orders of notice from 65 to 102. Haverhill and Lawrence had much smaller increases of 7% (from 134 to 147) and 6% (121 to 128). Conversely, Lowell experienced a notable decrease in the number of orders of notice (11%), from 210 to 188. Furthermore, foreclosures also showed signs of levelling off in the four cities after seeing large increases. Both Haverhill and Lowell saw sizable increases in foreclosure deeds, respectively 67% (from 63 to 105) and 47% (from 83 to 122). In contrast, Methuen and Lawrence witnessed significant decreases in foreclosures. Methuen experienced the largest decrease (18%), from 66 to 54, while Lawrence had a 14% decline. These trends in foreclosures and orders of notice could signal a slowdown in delinquent loans held by lenders. In terms of deeds, Lowell saw the largest jump of 21%, from 1768 to 2142. Haverhill and Lawrence both increased by 8%, Haverhill rose from 1557 to 1575, while Lawrence went up from 1105 to 1195. On the other hand, Methuen actually had a modest decline in deeds (0.2%), from 1245 to 1242. All four cities saw increases in mortgages, with Haverhill seeing the largest jump of 14%, from 2242 to 2561. Methuen and Lawrence had slightly smaller increases of 12%. Methuen increased from 1747 to 1948 while Lawrence increased 1451 to 1618. Lowell experienced the smallest increase of 10%, from 2517 to 2762. (continued on page 2) Deeds, Mortgages, Foreclosures and Orders of Notice Recorded December 2015 and December 2016 compared Haverhill Lawrence Lowell Methuen Dec-15 Dec-16 Dec-15 Dec-16 Dec-15 Dec-16 Dec-15 Dec-16 Deeds 143 155 77 99 152 174 119 120 Mortgages 202 242 109 169 216 248 136 202 Foreclosure Deeds Orders of Notice 5 9 7 1 12 4 9 7 13 11 6 10 16 12 1 9
Merrimack Valley Housing Report 2 Numbers in the Four Cities: 2015 v. 2016 continued. Although during the last two years we have seen a trend of increased orders of notice and foreclosures, more recently we have seen a leveling off of foreclosure activity. As we begin 2017, we will need to see if recent trends signal the beginning of decreases in foreclosure petitions and filing or a temporary hull. Methuen Deeds 1245 1242-0.2% Mortgages 1747 1948 12% Orders of Notice 65 102 57% Foreclosures 66 54-18% Lowell Deeds 1768 2142 21% Mortgages 2517 2762 10% Orders of Notice 210 188-11% Foreclosures 83 122 47% Haverhill Deeds 1557 1675 8% Mortgages 2242 2561 14% Orders of Notice 134 143 7% Foreclosures 63 105 67% Lawrence Deeds 1105 1195 8% Mortgages 1451 1618 12% Orders of Notice 121 128 6% Foreclosures 64 55-14%
Merrimack Valley Housing Report 3 2016 Real Estate Review By Richard P. Howe Jr. Real estate news in the Middlesex North Registry of Deeds District was mostly positive in 2016. The total number of documents recorded was up eight percent, rising from 60,516 in 2015 to 65,521 in 2016. Deeds were up 12 percent, rising from 6,913 to 7,776, and mortgages were up similarly, from 11,148 to 12,639. The amount of revenue collected by the registry of deeds was also up considerably, rising from $13.0 million in calendar 2015 to $16.5 million in calendar 2016, an increase of 27 percent. Part of the rise in revenue was attributable to the increased number of documents more documents mean more recording fees but the amount of deeds excise tax collected was also up 26 percent, increasing from $7.8 million to $9.8 million. Because the deeds excise tax is based on the sales price listed on a deed, increased tax collections are an indicator that property values are rising. Calculating the median sales price of recorded deeds corroborates this rise in real estate values. The median price for all deeds recorded for the registry district in 2016 was $307,500, an increase of five percent from the 2015 median of $292,500. Nine of the ten communities in the district saw median price increases in 2016 (Dunstable had no change), and median values in four of those communities have now surpassed the peak median value from the real estate bubble of last decade. Those towns are Billerica (2016 median of $370,000 is 103 percent of the 2005 bubble median of $359,900); Chelmsford (2016 median of $330,000 is 102 percent of the 2005 bubble median of $325,000); Tewksbury (2016 median of $354,950 is 103 percent of the 2005 bubble median of $345,000); and Wilmington (2016 median of $403,500 is 105 percent of 2006 bubble median of $384,450). Values in the six other district towns continue to claw back towards the peak values of the real estate bubble. Lowell s 2016 median of $229,700 is 90 percent of the 2005 bubble median of $254,900; Carlisle s 2016 median of $569,900 is 95 percent of the 2007 bubble median of $597,500; Dracut s 2016 median of $270,500 is 98 percent of the 2008 bubble median of $275,450; Dunstable s 2016 median of $430,000 is 93 percent of the 2005 bubble median of $460,000; Tyngsborough s 2016 median of $315,000 is 90 percent of the 2006 bubble median of $350,000; and Westford s 2016 median of $403,000 is 96 percent of the 2005 bubble median of $420,000. While rising property values are a good thing in general, they are particularly important in curbing the still-high rate of foreclosures. In 2016, there were 232 foreclosure deeds filed in the Middlesex North District (116 for Lowell, 36 for Dracut, 26 for Billerica, 17 for Chelmsford, 15 for Tewksbury, eight for Wilmington, seven for Tyngsborough, four for Westford, two for Carlisle, and one for Dunstable). Of the 232 mortgages foreclosed, 188 of them 81 percent originated during the real estate bubble (2003 through 2007). Of the rest, 38 mortgages (16 percent) originated post-bubble; and six (3 percent) originated pre-bubble). Almost everyone who obtained a mortgage during the real estate bubble has been underwater since the bubble collapsed, meaning that the amount they owe on the mortgage exceeds the value of the home. In such a situation, any disruption of income into the household (such as loss of employment, divorce, illness, or death) can leave a borrower unable to make the monthly mortgage payments. If the value of the home exceeds the debt, the homeowner can sell the home, pay off the debt, and get on with life. But when the amount of debt exceeds the value of the property, the only alternative is foreclosure. Hence, most of the 2016 foreclosures were of mortgages obtained when real estate values were at their highest. The benefit or rising real estate values is not limited to reducing foreclosure rates. For every home lost to foreclosure, there are many more underwater home owners who continue to make their monthly payments and remain in their homes. But as long as they are underwater, they are unable to sell and are locked into their homes, unable to upgrade or relocate for employment or other reasons. With today s rising values, more and more of these homes will be offered for sale, increasing inventory and strengthening the real estate market in 2017.
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Merrimack Valley Housing Report 5 The Merrimack Valley Housing Report is published by UMass Lowell and the Middlesex North Registry of Deeds Richard P. Howe Jr., Editor Richard.Howe@sec.state.ma.us David Turcotte, Editor David_Turcotte@uml.edu Paul Iannuccillo, Contributor Paul.Iannuccillio@sec.state.ma.us Emily Chaves, Research Assistant/Writer Emily_Chaves@uml.edu Kelechi Adejumo, Research Assistant/Writer Kelechi_Adejumo@uml.edu Syeda Nizami, Research Assistant/Writer Syeda_Nizami2@student.uml.edu Institute of Housing Sustainability c/o Center for Community Research and Engagement University of Massachusetts Lowell Mahoney Hall, 870 Broadway Street, Lowell, MA 01854 Tel. (978) 934-4682 www.uml.edu/mvhousing This project is funded in part by the Office of the Chancellor and the Office of Outreach. UMASS LOWELL Subscribe to the Merrimack Valley Housing Report To begin receiving this monthly e-publications, please e-mail David Turcotte at David_Turcotte@uml.edu