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Real Estate Trends: Prices Up
With 2018 nearly half over, some trends in local real estate have become apparent. For the entire Middlesex North District (which consists of Lowell, Billerica, Carlisle, Chelmsford, Dracut, Dunstable, Tewksbury, Tyngsborough, Westford and Wilmington), the number of sales from January 2018 through the end of May 2018 are about the same as January through May of 2017, but prices are up by 10 percent or more. This seems like a classic supply and demand example: there are fewer houses for sale than there are buyers, so sales prices go up.
Here’s a look at the median price of deeds recorded between January 1, 2018 and May 31, 2018 compared to the median price for the same months in 2017 for the eight largest communities in the district:
- Lowell: Up 9%, from $235,000 to $255,000 (based on 552 deeds)
- Billerica: Up 5%, from $383,000 to $403,500 (based on 214 deeds)
- Chelmsford: Up 7%, from $347,500 to $371,250 (196 deeds)
- Dracut: Up 26%, from $253,000 to $319,500 (226 deeds)
- Tewksbury: Up 7%, from $360,000 to $384,000 (154 deeds)
- Tyngsborough: Up 9%, from $300,000 to $327,500 (64 deeds)
- Westford: Up 14%, from $449,500 to $484,000 (128 deeds)
- Wilmington: Up 12%, from $432,500 to $484,000 (111 deeds)
There is an odd twist in the market. Typically, as prices go up, the number of foreclosures goes down. That’s because in a time of rising values, a homeowner who is unable to pay the mortgage can usually sell the house for enough money to pay off the mortgage. Granted, the homeowner would still have to find a residence, but leaving voluntarily with a discharged mortgage is better in the long-term than losing a home to foreclosure.
Despite the rise in prices during the January through May 2018 time frame, the number of foreclosures (106) was up from the number that occurred during the same months in 2017 (92). Adding to this mystery is that most of the mortgages that were foreclosed in 2018 originated during the real estate bubble (from 2003 into 2008). Perhaps because values today have still not exceeded the peak prices reached during that real estate bubble, these homeowners remain underwater on their mortgages and are unable to sell for that reason. This might also explain why so few houses are going on the market today: homeowners who refinanced or purchased at a time of peak real estate bubble prices may still owe more than they can get for the house today and so are unable to sell.
One other question about these new foreclosures of old mortgages is why now? Did these homeowners suddenly stop paying mortgages they’ve had for ten or more years, or have they been in default all along and the lender just failed to do the foreclosure sooner? It’s hard to answer that question from the records at the Registry of Deeds.
One thing that is clear is that almost all the mortgages being foreclosed were made by national lenders. It’s very rare to see a local bank doing a foreclosure. The performance of our local lending institutions now and during the foreclosure crisis is a positive story that may not have gotten the attention it should have.
Also regarding foreclosures, for at least the past three decades, the purchaser at a foreclosure auction was almost always the lender doing the foreclosure. There were a number of reasons for this. The foreclosing lender has a duty to the debtor to obtain a fair price for the property and often third party bidders at foreclosures would not bid amounts close to that. Also, from a bookkeeping perspective, if the lender purchased the property for the full amount that was owed, the bank would be exchanging one asset on its books – a debt owed to it – for another asset of identical or greater value – the foreclosed property. It did not matter that the actual fair market value of the property was much less; the lender could carry the property on its books at the price bid at the auction. In this way, the lender could put off taking the loss for months or even years as the property say vacant.
Contrary to this history, foreclosing lenders today seem increasingly willing to sell to third party bidders at the foreclosure auction. This suggests that auction bid prices are closer to the actual fair market value of the property which makes sense given rising values. This is also beneficial for the community since when the property is sold at auction to a third party, it is less likely to remain unoccupied for an extended period of time which is what happened when the lender bought at auction and then put the property on the market afterwards.
One final note related to foreclosures is that many of these third party buyers at auction are limited liability companies (LLCs) with names that suggest they are in the business of holding and renting properties over the long term. Properties being bought by these entities are typically two or three family homes that were once owner-occupied. Converting these from owner-occupied rentals to a more corporate ownership structure could have negative consequences if distant investor/owners fail to have an active local presence to oversee and maintain these properties.
Planning Board Projects
Every couple of weeks it’s worthwhile to check out the projects pending before the Lowell Planning Board. Here are a few worth noting:
279 Dutton Street – The former Ymittos Candle Manufacturing Company site (Ymittos sold the building and moved to 325 Chelmsford Street not long ago). This proposal would convert this building to several residential condominium units which would be consistent with adjacent structures on that part of Dutton Street.
70 Industrial Ave East – A proposal by Patriot Care Corporation to open an “adult use marijuana establishment.” This site is on the east side of the Lowell Connector (i.e., the side opposite the Cross Point towers) and is adjacent to the Courtyard by Marriott Hotel. Patriot already operates a medical marijuana facility in the same building. In its application, Patriot reminds us that the voters of Lowell supported the adult use referendum by a margin of 56 to 44 percent.
677-705 Pawtucket Boulevard (corner of Old Ferry Road) – This is a pre-application review of a proposed Market Basket store on the former drive in movie site behind JJ Boomers. This store would be 69,000 square feet in size and would have a 12,000 square foot retail space attached with more than 400 parking spaces. JJ Boomers would remain although the landscaping and layout of the entire parcel would be altered to improve access.
78-90 Lakeview Ave – The former Larry’s Comic’s building at the intersection of the VFW Highway and Lakeview Ave. The applicant here is a Domino’s Pizza franchisee who seeks to move the outlet now located at 681 Bridge Street into about half of this building (nothing yet on how the other half of the building would be used). Preliminary comments by city officials seem supportive although they would prefer that the customer portions of this building which will be the only side with windows be oriented towards Lakevew Ave rather than towards the VFW Highway as the submitted plan shows. This would enhance the walkability of Lakeview Ave at that point.
Political Lawn Sign: Time Limits
Most communities have ordinances or by-laws that limit the time during which political lawn signs may be displayed, however, almost all such ordinances were rendered unenforceable by a 2015 United States Supreme Court decision in Reed v. Town of Gilbert. Reed was the pastor of a church in Gilbert, Arizona, that rented space in various buildings in which to hold services. On Saturday, church members would place signs around town advertising the location and time of church services. This practice violated a town by-law that limited when and where signs could be erected. The town issued a citation and Pastor Reed sued, claiming the restriction violated his First Amendment right to free speech.
Although lower courts found for the town, the US Supreme Court, in a decision written by Justice Clarence Thomas, held that the sign ordinance was content-based and therefore was subject to “strict scrutiny” by the court, a standard almost impossible to meet. Thus, the town of Gilbert’s sign ordinance (and hundreds of thousands of other sign ordinances on the books in communities around the country) was rendered unconstitutional. Few municipalities have repealed their sign ordinances, but hardly any enforce them, particularly when it comes to political signs.
A Fun Saturday in Lowell
The arrival of warm weather brings an abundance of outdoor activities to Lowell. That was especially evident yesterday as the following photos attest:
Mimi Parseghian shares her observations on the past week in Lowell:
This week’s City Council meeting had two separate discussions on marijuana. With the impending launching of the recreational cannabis industry, the Councilors have begun to count the tax revenue that is estimated to be generated by these sales. There seems to be an optimistic approach to how much money will be coming our way.
On one hand, we are eager for the tax revenue and on the other hand, the Council by a vote of 5-4 approved a motion to establish a marijuana oversight sub-committee. This Council has 18 Sub-committees and one ad-hoc subcommittee on Election Laws.
I was always under the impression that a Subcommittee was created and members assigned at the discretion of the Mayor. The following statement appears on the On City website’s page on Council Sub-Committees: “The City’s Mayor is responsible for the creation of “standing” and “ad-hoc” City Council subcommittees and the appointment of members to them.”
I must be misinterpreting that rule. No one objected, although the Mayor expressed a different approach.
Speaking of Subcommittees, he Election Law Subcommittee (Chair, N. Nuon; E. Kennedy and J. Leahy) is continuing their tour of various neighborhoods to listen and discuss with engaged residents what direction Lowell should take in the Municipal Election process; that is for City Council and School Committee. Currently all seats are at-large with the introduction of the lawsuit, the discussion has been elevated.
Having attended a few of these meetings, it is my sense that there is a strong element within the City Council that wants to revise how they are elected. The question is what type of structure we select. My preference would be to keep the current Plan E form of government with 3 at-large and 6 district Councilors. There has been some talk to introduce other changes but it may be best to take one step at a time.
As far as the time table is concerned, I would think the subcommittee would bring back their final report and suggestion to the Council before the end of the summer. I could be wrong since I am not a budget analyst but a legal fight of that magnitude requires funds. I do not see money in the budget that indicates the City is getting ready to fight the lawsuit.
City Manager Eileen Donoghue will hold a Listening Session on the search of a new Lowell Police Superintendent. According to the City website, City Manager Donoghue “has had meetings with key community groups and leaders in order to hear what is important to them and what qualities they would like to see in our next Superintendent.” This public meeting is part of this process. It will take place on June 27, 2018 at 6:00 p.m. at the Lowell Senior Center, 276 Broadway Street.
This is a great opportunity for those who have concerns or suggestions to step forward and voice their opinion in a public setting.
Yard signs have begun to pop up for the candidates for the various offices. The City of Lowell has an ordinance that dictates when these signs can be put up and also when they are required to be taken down. That is how many days before the election and how many days after the election.
With a couple of major elections and so many people running, it is going to be difficult to get quality space. Those who have previously run for office may have a list of locations they had previously used. As for first-time candidate, identifying locations that would put up their sign may be more challenging.
When it comes to yard signs some businesses that allow political signs to be put up on their property have an open door policy. If you ask, they do not say no. Some are more selective, which I do not understand. Why offend or disappoint some of your clients?
Homeowners are different. Some may have 2 or 3 signs of the same candidate; some may have a few signs of different candidates; a few may have signs of opposing candidates but my favorite is the lawn with just one sign.
From hand-copied book pages in cursive to digital images that have never existed on paper, the records at the Registry of Deeds have become more accessible through the evolution of information technology. Here’s the story of how that has happened at the Middlesex North Registry of Deeds:
One of the basics of the Massachusetts land records system is that the registry of deeds only makes a copy of the original real estate document which is returned to its owner once the official copy is made. That’s how the system worked back in the 1600s and that’s how it works today. However, the tools we use to make and maintain those copies have changed through the years.
From the 1600s up until 1924, registry clerks would hand-copy original documents using pen and ink. Rather than file these copies by address or owner name, the registry inserted these copies into bound record books in the order they were received. Each book was given a number and each page within the book was also numbered. The book and page number where the document could be found became the unique identifier of that document. That same book and page numbering system is still in use today despite major changes in how records are created and stored.
The first big change in record-creation came in 1924 when the registry began using typewriters to make the official copies of recorded documents. Subsequent changes in record-creation accompanied new technologies. For instance, during World War II, the use of microfilm as a document storage medium became widespread and affordable. Soon after the war, the Registry of Deeds adopted that technology to create backup copies of records that could be stored safely offsite. (The previous disaster recovery plan relied on “fireproof steel storage cabinets” located within the registry).
Along with microfilm as a storage medium came the ability to make highly-legible paper prints from the microfilmed document image. This new technology not only save a substantial amount of employee time that was previously devoted to retyping entire documents, it also yielded an exact replica of the original document, complete with signatures, stamps and other markings. Beginning in 1949, these paper prints from microfilm were used to create the pages of registry record books.
This method of creating record book pages from microfilm prints continued up until 1995, the year I became register of deeds. Just a few months earlier, in November 1994, the registry had installed its first computerized document scanner, a Wang product, of course. Registry personnel would scan newly recorded documents to produce digital images that could be viewed on public workstations at the registry and via a dialup modem for remote users (who were charged for access). But the same digital image intended to be viewed on screen would also yield an excellent paper print of the recorded document, so we switched book production from paper prints from microfilm created to paper prints from scanned images. Not only did the scanned image create better quality book pages, they could also be produced in-house with existing personnel and equipment which resulted in substantial cost savings and a much faster method of getting books on the shelf.
Scanning digital images of original paper documents remain the primary means of creating official registry document copies today. However, we did stop producing paper record books in 2001, both as a cost-savings measure and because we were running out of shelf space to store the new books. Thereafter, the official registry copy of a recorded document was a digital image with microfilm backup. Although paper record books are no more, the same book and page numbering system continues as the primary method of identifying documents.
To provide some idea of the savings that this shift away from paper created, consider that from 1855 (the year this registry opened) up until 2001 (when the last paper book was printed) the registry had accumulated 12,442 record books. In the 17 years since then, we have created 19,700 digital-image only record books. Given that the cost of producing a single record book in 2001 was approximately $50 in paper, plastic cover, printer toner and employee time, that has yielded savings of $985,000 in 2001 dollars, not to mention the additional costs for shelving and floor space for that many additional physical books.
Advances in technology continue to cause Registry of Deeds procedures to evolve. In 2005, Middlesex North became the first registry of deeds in Massachusetts to implement a full program of electronic document recording. This allows attorneys, lenders and other real estate professionals who sign-up for secure internet connections with the registry of deeds to record documents electronically. By that method, the submitter scans the original paper document at his or her office and transmits the document image and indexing information electronically to the registry. At the registry, the incoming image fills the screen of a recording terminal. If all is in order, the registry employee clicks “record” and the document is immediately filed in the registry records with recording fees being paid by an electronic transfer of funds from the submitter’s bank to the registry’s bank. In 2017, electronic recording accounted for 55 percent of all recordings at the Middlesex North Registry of Deeds.
The next generation of electronic recording, already legal and feasible but not widely used, involves documents that are created, displayed, executed and acknowledged purely in electronic form. The Middlesex North Registry of Deeds is already capable of accepting such recordings which will become more widely used as younger home buyers who have known nothing but electronic commerce, force the real estate and lending industry to dispense with paper and transition entirely to digital transactions.
This is the 58th installment of my Lowell in World War One series which commemorates the centennial of the entry of the United States into World War One. Here are the headlines from one hundred years ago for the past week:
June 10, 1918 – Monday – Germans suffer enormous losses in latest plunge towards Paris. Huns attack along 22 mile front between Montdidier and Noyon. General Pershing reports repulse of heavy Hun attacks near Bouresches. Reports artillery fighting in Chateau-Thierry and Picardy sectors. Private Walter Bruce dies in France. Private Bruce, of Company M, 101st Infantry, died from wounds received in action. He lived at 27 George street and had served with Company M since February 1916 including time along the Mexican border. Lowell’s thrift stamp campaign organized. The purpose of this campaign is to have one person out of every four in Lowell sign a pledge saying that he or she will buy at least one war savings stamp in 1918. You simply make a promise to your government that you will loan money which will later by repaid with interest. Everyone who buys a thrift or war savings stamp will be given a paper pennant showing that he has done so and it is hoped by the committee that every home in the city will have one of these emblems. There will be no buttons in the campaign. Lowell Mill agents to meet tonight to discuss worker demand by mill operatives of the United Textile Workers of America for a fifteen percent wage increase.
June 11, 1918 – Tuesday – Germans continue to gain in spite of frightful losses. Huns advance six miles at Vignemont. Battle has now entered critical state. Government to assist in housing problem here. Although nothing is yet definite, indications given to the local board of trade are that the Department of Labor will provide money to Lowell for emergency housing. The board of trade held a conference with officials of the United States Cartridge Co., and with the textile mill agents. The delegation from Lowell is expected to be in Washington this Thursday for a meeting with federal officials. Members of the board of trade feel that this may lead to the expenditure of several hundred thousands of dollars in Lowell in a way that is helpful to the permanent development of the city as well as to meeting the emergency of war production. Cartridge workers want more pay. The superintendent of the local plant, Gerald Cahill, would not confirm rumors that machinists at the plant had asked for an increase of 35 cents an hour, but stated that all employees have asked for an increase.
June 12, 1918 – Wednesday – French make big advance and threaten recent gains made by German troops. Many prisoners taken by British north of Somme. Volume of war orders in the east will be limited to protect against overburdening factories, rail lines, and fuel supplies in New England and along the Atlantic Coast. The government will send new contracts to factories in other parts of the country. Mechanics are wanted for tank service. Lt T W Crosby of the US Army’s tank service will be in Lowell today seeking to enlist Lowell mechanics.
June 13, 1918 – Thursday – French strike mighty blow and halt Hun march on Compeigne. Americans repulse Huns near Marne. Plans perfected for Flag Day observance here. Campus at State Normal School scene of great beauty. Appreciated gathering sees brilliant pageant of Allied Nations as presented by the Normal and Bartlett School students. Attractive costumes featured. The police have started a crusade against bicycle riding on sidewalks following numerous complaints.
June 14, 1918 – Friday – UBoats renew attacks off coast. Hatest Hun attempt to break French lines fails after five days of bitter fighting. Sectors where the Americans are fighting are heavily bombarded. Private Myles F. Ralls of 111 Grand Street was severely wounded in action in France on June 7 according to a telegram received by his parents. Street parade this evening will feature Flag Day observance. The parade will begin at 7pm sharp at Market Street near Dutton.