Boston Distressed Properties Surging in Suburban Communities- By: John Cutts
Boston distressed properties continued to surge in suburban communities, based on records from Warren Group, the Massachusetts Mortgage Bankers Association and local realtor associations.
Previously, the foreclosure problem was contained in the center of the city and in lower-income communities, but as the economy worsened and executive-level positions were included in layoffs, the claws of foreclosure crept into upscale neighborhoods in the suburbs.
Not only primary homes were affected; vacation houses in white-collar suburban neighborhoods were swept up into the vortex of the foreclosure crisis.
According to the Massachusetts Office of Labor and Workforce Development, unemployment in the state in December hit 9.1 percent, a sharp jump from the November rate of 8.3 percent. The Merrimack Valley posted record job losses, pushing up the jobless rate in the Lawrence-Methuen area to a staggering 13.7 percent and the jobless rate in the Billerica-Lowell area to 9.7 percent.
The only places that posted rates lower than the statewide rate was Peabody, with 9.1 percent, and the Haverhill-Amesbury area, with 8.9 percent.
Kevin Cuff, head of the Massachusetts Mortgage Bankers Association, said that many of the suburban families whose homes entered listings of distressed properties in Boston had strong credit scores and were earning incomes much higher than most in the area. Because of their high levels of income, they were able to buy bigger and more beautiful homes, but when they lost their jobs, they could no longer make their loan payments.
Foreclosure filings in Billerica surged by 36 percent year-over-year to 157 while postings in Middleton rose from only three in 2008 to 25 filings in 2009.
In Essex, Andover, Beverly, Manchester-by-the-Sea and other suburban areas, foreclosure auctions were being held by Stanley Paine Auctioneers at a rate of ten to 12 auctions a day.
Among the homes auctioned off were a two-family house in Danvers that was sold off for $167,000; a house in Newbury that was taken back by lender Bank of America because nobody topped its starting price of $434,738; and a waterfront house in Essex which was sold off for $505,000.
In Lynn, the biggest city in Essex, a total of 313 homes were sold at public auctions last year, many of which were located in middle-income neighborhoods.
According to the Neighborhood Legal Services and United Way, the number of Boston distressed properties has been rising in the suburbs mainly because of job losses and sharp reductions in income.
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John Cutts has been educated in the finer points of the foreclosure market over 5 years.