Massachusetts

Foreclosures are hitting Massachusetts hard. An over abundance of inventory is pulling housing markets in Massachusetts into an unprecedented real estate market slowdown. Home sales are off and the time it takes to sell property is getting longer and longer. The credit crunch is beginning to have a major impact.

Foreclosures may effect up to 1 out of 10 homeowners in Massachusetts, which is only part way through the housing crisis.

In Boston, where the majority of the state’s population lives in the Boston metropolitan area for sale signs stand in front yards on almost every street. Foreclosures are increasing in Boston, and they aren’t just occurring in working class neighborhoods. In one of the nation’s wealthiest suburban clusters of Wellesley, Sudbury and Newton foreclosures are up indicating the housing bust isn’t just a subprime problem.

An over abundance of homes for sale plagues the market place. Conventional adjustable rate mortgages and easy to obtain subprime mortgages provided during an era of loose lending is making a damaging impact on the area’s economy.

City	Forecast
Boston	− 11.7%
Cambridge	− 10.3%
New Bedford	−   8.8%
Lawrence	−   9.5%
Andover	−  10.1%
North Andover	−  10.1%

Many homeowners with adjustable rate mortgages are finding themselves in the position of being unable to refinance their mortgages since housing values have already dropped so much. Boston is forecast by Housing Predictor to see slower home sales on the way to 11.7% in deflation for the year.

In Cambridge the market is also hard hit, and should see even slower home sales this year on 10.3% depreciation by year’s end.

Lawrence in northern Massachusetts had the highest number of subprime loans made in the state, and foreclosures have nearly doubled. Mounting numbers of foreclosures have gained the attention of Hispanic leaders in Washington, D.C. but residents are getting little help as foreclosures rise. The real estate market is ailing in Lawrence.

Every level of housing from low priced condos to high end homes are effected. Sales will remain at a snails pace in 2008 in Lawrence, which is forecast to deflate 9.5% for the year in average home prices. A coalition of Lawrence homeowners has filed lawsuits against mortgage companies charging fraud.

In Andover and neighboring North Andover it’s taking months to sell homes listed for sale, a far cry from the over heated market of two years past. Andover is seeing few home buyers these days, and those that can get a loan to buy are taking longer to decide. Andover and North Andover will see slow sales through the year on average deflation of 10.1%.

Foreclosures are also rising in old New Bedford, where the housing market boomed during its hey-day. Many new homeowners are just leaving the keys on the counter these days as higher adjustable rate mortgages get increased so much they cannot afford them in this old rustic New England community. Many are first time home buyers. Housing Predictor forecasts New Bedford will average deflation of 8.8% in 2008.