Local real estate trends

With August half done, here’s a glance at some local real estate statistics. Anyone with an internet connection can do a similar analysis. Just go to the Middlesex North Registry of Deeds website, click on the yellow “search” box then the “document” tab and select the document type and the date range and click “search.” Below I’ve compared the number of several document types recorded during the first half of August with the number recorded during the same period in 2010 and then did the same for the month of July.

From August 1 to August 15, 2011, the number of deeds recorded (232) was up 40% from the same period in 2010 (166).
From August 1-15, 2011, the number of mortgages recorded (392) was down 18% from 2010 (480).
From August 1-15, 2011, the number of foreclosure deeds (17) was down 41% from 2010 (29).
From August 1-15, 2011, the number of orders of notice (new foreclosures)(37) was down 16% from 2010 (44).

Here are similar figures from July:

In July 2011, 474 deeds were recorded, an 8% increase from the 440 recorded in 2010.
In July 2011, 765 mortgages were recorded, a 21% decrease from the 971 recorded in 2010.
In July 2011, 37 foreclosure deeds were recorded, a 34% decrease from the 56 recorded in 2010.
In July 2011, 52 orders of notice were recorded, an 11% decrease from the 47 recorded in 2010.

So what to make of these numbers? The significant decrease in the number of mortgage recorded is perhaps the most significant number. This represents a sharp decline in the number of refinancings taking place. The incredibly low mortgage rates now being offered pose no obstacle, but lenders seem to be much more hesitant to make loans – or at least are imposing much stricter standards in approving loans – than in any time in recent history. Another factor is the number of homeowners who are still “underwater” on their current mortgages, meaning that they owe more on the mortgage than the house is worth. Such a condition makes it nearly impossible for them to refinance. Even so, there are many people who would qualify for new mortgages but they’re just not getting them which I believe is further evidence of a lack of confidence in both the economy and current real estate prices.

The impressive increase in the number of deeds recorded is also significant and is a positive. While many of the deeds are previously foreclosed properties now being sold by lenders-in-possession, there are also plenty of arms-length sales. If you’re able to sell your own house, there are some good buys out there and some people are using the previously mentioned low interest rates to take advantage of these opportunities.

The decrease in foreclosure deeds, while positive, is not that significant. Foreclosure deeds are recorded many months after a foreclosure auction occurs, so this number is what might be called a “trailing indicator.” A “leading indicator” in this field is the order of notice, which is the document that signals the start of a new foreclosure. Orders of notice being down 16% in the first half of August and 11% in July is indeed a good sign, suggesting that the number of foreclosures we will see in the region in the coming months will be less than from a year ago.