Local Real Estate in 2020

The year 2020 will always be known for the Covid-19 pandemic but it has also been an incredible year for real estate. The number of deeds recorded at the Middlesex North Registry of Deeds in 2020 and the median price of those deeds are both up 10 percent from 2019. For example, the median price for a Lowell deed, $329,875, was up 12 percent from the median price in 2019 ($295,000) and that was up 16 percent from 2018 ($255,000). The region is also in the midst of a mortgage refinancing boom. The number of mortgages recorded in 2020 (17,299) was up 50 percent from the number recorded in 2019 (11,631).

Historically low interest rates are driving this surge in activity and people in all sectors of the real estate business have used technology and innovative practices to allow all of these transactions to occur. Like the stock market and the overall economy, the positive news from the real estate market seems strangely out of sync with our lived experience since the onset of the pandemic. Still, there is no indication that the real estate market will suddenly reverse course.

Foreclosure-related filings are always a leading indicator of the direction of the real estate market. When there is a boom, there are few foreclosures. When the bubble is about to burst, the number of foreclosure filings begins to rise. However, due to a moratorium on most foreclosures in Massachusetts that extended from March to October, the number of foreclosure filings will be deceptively low.

Before the pandemic struck, we recorded 12 foreclosure deeds in January, 5 in February, and 15 in March. But there were also 23 orders of notice in January and 25 in February. (An order of notice marks the start of the foreclosure process). From April through December there have been a total of 17 foreclosure deeds recorded and just 14 orders of notice. Those numbers will likely rise substantially in the coming months as lenders catch up to the many individuals who have been unable to pay their mortgages due to lost income. Because real estate values continue to rapidly increase, many homeowners at risk of foreclosure will be able to sell their homes and realize enough money from the sales to pay off their outstanding debts and thereby avoid actual foreclosure. However, those same people will still need a place to live. (Tenants facing eviction face a crisis equal to or worse than homeowners facing foreclosure, but the registry of deeds does not have data on rental properties).

In addition to the increase in volume of deeds and mortgages, the total number of documents recorded was also up, rising from 60,104 in 2019 to 69,191 in 2020, an increase of 15 percent. How all those documents got recorded presents an interesting story: From mid-March until the end of the year and continuing, in person access to the registry of deeds has been prohibited or severely curtailed due to the pandemic. And just as the March shutdown began, the registry moved from its home of 165 years in the Middlesex Superior Courthouse at 360 Gorham Street in Lowell to the new Lowell Justice Center at 370 Jackson Street, also in Lowell.

In both locations, customers have been able to leave documents to be recorded in a “drop box” at the entrance to the building and the registry still receives US mail and Fedex and UPS deliveries. But the vast majority of documents filed come through the electronic recording process. From 2016 through 2019, electronic recording accounted for more than 50 percent of all recordings, but since the pandemic lockdown in 2020, nearly 90 percent of all documents arrive at the registry that way.

Every indication is that the pandemic will persist well into 2021 so the registry’s new manner of operation will continue as well. So will the boom in real estate although that will likely be tempered by steadily rising foreclosure rates.