Foreclosures are spreading like wildfire in the suburbs. And while sad as this wave of distress is, it may provide some buying opportunities in our perpetually overpriced Greater Boston market.
I spent time last night studying a foreclosure spreadsheet covering most of the towns and cities across our metro area put together by RealtyTrac.
The typical suspects - poor urban neighborhoods and small industrial cities - continue to struggle, with foreclosure activity, everything from initial notices to auctions, measuring well into the hundreds.
But the volume of activity is surging in the suburbs, especially in some of the towns along the Boston-to-Providence corridor and along the South Shore as well, especially in the Plymouth area.
There's a lot of data here, so for today, I am going to focus on those southerly suburbs on the Providence corridor, stretching from Medfield and Walpole to Wrentham, possibly one of the more intriguing buying opportunities out there.
The prices are generally a step down from the tony western suburbs, while the commute to Boston is still endurable. Jump on the commuter rail say in Walpole and you are in town in 45 minutes to an hour - as far as I know there are no competing freight trains, as there is on the Wellesley/Framingham line, to constantly derail schedules.
After skyrocketing during the bubble years, prices have also settled back to earth in these towns, with the median price of a home in Medfield now back at $565,000. Other towns in the southerly suburbs, like Millis, Medway, Norwood, Walpole, Sharon and Foxboro, have median sale prices in the $305,000-to-$370,000 range.
And it's an area that is now seeing a sharp spike in distressed properties. While the numbers may seem small compared to the hundreds of foreclosure notices and auctions that have ripped through Boston's poorer neighborhoods in just the first four months of the year, in many cases foreclosure activity in these towns is on par or exceeds regular sales activity.
More than 70 homes in Franklin fell into trouble during the first four months of the year, spanning the range from initial foreclosure notices to auctions. Through the end of April, by contrast, 63 homes were sold in the town, at a median price of $373,000, the Warren Group reports.
Other towns in Boston-to-Providence corridor are also seeing sizable jumps during the first four months of 2010 compared to the same period in 2009, RealtyTrac reports. All sales numbers and prices below come from the Warren Group.
- Medfield saw 16 homes fall into foreclosure trouble, a 250 percent increase, compared to 33 homes sold overall. The median price is $565,000.
- Sharon saw a 100 percent jump in foreclosure activity involving 34 homes, a doubling from the same period in 2009. Forty homes were sold during the same period, at a median price of $370,500.
- Medway experienced a 275 percent surge in foreclosure activity involving 45 homes. That is well more than the 25 homes that sold during the first four months of the year, at a median price of $325,000.
- Foreclosure activity in Millis soared 250 percent, affecting 28 homes, more than double the 12 homes that sold in town through April at a median price of $306,000.
- Foxboro saw foreclosure activity jump 68 percent, with 27 homes involved, compared to the 31 homes that sold during the same period at a median price of $351,000.
The mistake when looking at foreclosure data may be in thinking too literally - great, I will try and snag a home set at a foreclosure auction.
The auctions are tricky and by that point the bank or investors with cash to burn have already swooped in. But there are a whole bunch of homes that never get that far - the owners are facing trouble but trying to do a short sale or are just ready to bargain and sell fast.
Beyond that, a rising number of distressed properties in a particular town are certain to put downward pressure on prices, forcing other prospective home sellers to compete.
Anyway, I've got a lot of data here - I will take another crack at it next week.
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