Massachusetts Foreclosures up 70% in 2007

Time icon February 1st, 2008 by Autor Joseph Smith

Despite a drop during the month of November, Massachusetts foreclosures on the whole were on the rise in 2007, surging roughly 70% above their 2006 levels at the end of the year.

However, statistics over the final four months of the year indicated that the rate of new Massachusetts foreclosure homes was dropping. During November, the rate of foreclosure dropped about 14%, with only 640 homes being listed as entering some stage of foreclosure. In August, however, this number was up around 1,000, indicating that things may be beginning to turn around in the Bay state.

At the top of the list of foreclosed properties hotspot areas in Massachusetts are of course the urban areas. Boston foreclosures, Worcester foreclosures and Springfield foreclosures are all at very high levels, as lower income urban areas have been falling victim to rising interest rates. Adjustable rate mortgages are seen as a major culprit in the foreclosed real estate situation in Massachusetts. In the beginning of the decade, many properties were bought up by investors hoping to flip them quickly in this state where real estate has traditionally in high demand. But once the market took a turn, investors and homebuyers alike were stuck with homes they couldn’t keep up mortgage payments on and couldn’t flip for close to the value originally paid for them. This turned many properties into foreclosed homes.

Suburban areas around cities seem to be evening out in terms of their real estate foreclosures levels, but just because the rate of new foreclosure is slowing, it doesn’t mean that there aren’t still plenty of foreclosed properties available. Investors have slowly been picking up on this trend, and investing in Lowell foreclosures, Quincy foreclosures and Brockton foreclosures, predicting these areas will soon come around and property values will begin to rise.

However, many are wary of predicting any sudden upturns in the market. Massachusetts has been plagued by falling home values, low demand and rising foreclosures for some time. And with more mortgages set to go into a period of adjustment over the next year, we’ll probably still see some continued property foreclosure surges in 2008.

For investors, this probably means that it’s not imperative to jump on house foreclosure purchases right away, but buying now may be a good chance to take advantage of the flooded market and get an excellent low price, assuming they can get mortgages that will allow them to hang onto their purchase for at least a year or so with low mortgage payments, while renting them out until they can be resold for a profit.

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