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Boston Bank Owned Homes Falling in Number, Pushing Prices Up

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By : John Cutts    99 or more times read
Boston bank owned homes have been falling in number, pushing prices up, based on reports from real estate information provider Warren Group and other research firms.

According to the researchers and analysts, Greater Boston does not have the shadow inventory of foreclosures that other large cities have. The firm also explained that the lack of new home construction in Boston during the boom has saved the city from the gravity of foreclosure problems suffered by other cities.

The analysts also said that Boston does not have the abandoned foreclosure towns common in large cities where sprawling new residential communities and developments collapsed.

While other large cities continue to struggle from home price declines, Boston showed significant price appreciation in January. Home prices in Boston increased year-over-year by 1.7 percent, the highest among Los Angeles, San Francisco, Denver and San Diego, which all posted less than one-percent increases.

For prospective home buyers looking for lower-priced houses in the Boston area, they have to go to places farther away from the center of Boston. Communities where prices have dropped over the 5-year period from 2005 to 2009 include Roxbury where the median has dropped by 43 percent to $195,000; North Shore where the median has dropped by 24 percent to less than $400,000 and rural Harvard where the median has fallen by 26 percent to $457,000.

In December, the percentage of Boston bank owned homes compared to properties listed for foreclosure auctions has also dropped sharply. In 2008, about 90 percent of properties being auctioned off were taken back by lenders. At the end of 2009, the percentage has fallen to 67 percent.

In 2009, foreclosure activity in the Boston-Cambridge metro area declined sharply by 20 percent. The area was also in the bottom half of a ranking of metro areas surveyed based on foreclosure rate.

Another real estate firm reported that resale homes comprised the huge majority of the Boston market. About 84 percent of all homes for sale are previously owned homes. The rest are foreclosure properties and a sprinkling of new homes. The city of Boston has been able to control new housing construction over the past years.

According to Warren analysts, Boston bank owned homes are also getting sold faster because of rising demand from investors and owner-occupant buyers. Banks have been selling over 70 percent of their REOs within a few months after they took back these properties from the foreclosure auctions.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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