Lowell Deeds

Here’s a comparison of the number of key documents recorded for the city of Lowell in September 2007 and September 2008:

Deeds - in Sept 2007, 157 deeds were recorded. In Sept 2008, there were 144 - an 8% decline
Mortgages - in Sept 2007, 268 mortgages were recorded. In Sept 2008, there were 196 - a 27% decline
Foreclosure Deeds - in Sept 2007, there were 24 foreclosure deeds. In Sept 2008, there were 26 - an 8% increase.

The new Sales and Foreclosure report is available on our website. It ontains a town-by-town lists of property sales and foreclosures for September 2008 and the year-to-date.

www.boston.com just put up a Warren Group report that the number of foreclosure deeds recorded in Massachusetts for the first seven months of 2008 exceeds the total number of foreclosures recorded for all of 2007. I’ve made a similar comparison for the Middlesex North District (using statistics through the end of August) and found the following:

The number of foreclosure deeds recorded for the entire Middlesex North District for the period of Jan 1 through Aug 31 of 2008 (427) was 47% higher than the number recorded for the same period in 2007 (290). The individual towns in the district also saw significant increases. Except for Chelmsford (an 11% increase from 18 to 20) and Dracut (a 28% increase from 39 to 50), the other communities all had increases of 47% or more (because of the small number of transactions, Carlisle and Dunstable were not included in this analysis). Lowell had a 47% rise, from 177 to 261; Tyngsborough had a 50% increase, from 8 to 12; Dracut (24 to 40), Westford (6 to 10) and Wilmington (9 to 15) all saw increases of 67%.

If there’s any good news it’s that the number of foreclosures being recorded from month-to-month in 2008 seems to have peaked in May. Here are the monthly totals: Jan - 39; Feb - 36; Mar - 57; Apr - 67; May - 75; Jun - 54; Jul - 52; Aug - 47.

Here are some numbers for July 2008 compared to the same month in 2007:

In July 2008, we recorded 531 deeds. In July 2007, there were 593.
In July 2008, we recorded 926 mortgages. In July 2007, there were 1366.
In July 2008, we recorded 52 foreclosure deeds. In July 2007, there were 50.
In July 2008, we recorded 78 orders of notice. In July 2009, there were 79.

As far as foreclosure activity is concerned, it looks like we’re no worse off than we were last summer. Since last summer was bad, that’s not saying much, but at least it’s not getting any worse. The number of deeds recorded remains stable but there’s a major drop in the number of mortgages - a 32% decline.

I hate malls, shopping and stores…that said, the latest news reported by the Wall Street Journal still concerns me. “Vacancies at retail properties rose to a multi-year high in the second quarter as retailers closed stores and curtailed expansion plans”(Wall Street Journal). The Journal attributes the problem to the slow down in the housing market (it amazes me how the housing market touches everything) and weakening consumer confidence. “Vacancies at enclosed malls in 76 major US markets rose from 5.9% in the first quarter to 6.3% in the second quarter, the highest level since early 2002…” (The Journal). Enclosed malls??? “Faring worse were the open–air retail venues such as big-box centers and grocery-anchored strip centers” (The Journal)…open-aired??? “Vacancy in those formats climbed from 7.7% to 8.2% in the second quarter”(The Journal)…I’m not an economist (or a shopper as I mentioned). But why would there be a difference between the open aired and the enclosed mall vacancy rate? Well, it seems that most enclosed malls are composed of a well established group of franchised stores (I’ll bet you could name a few), while open-air malls have more local grown retailers. These mom-and-pop retailers are usually less able to with-stand an economic slow down. The Journal is also reporting that several major retailers have decided to shelf their expansion plans…Kohls, Chico’s and Starbucks to name a few. It is unlikely the vacancy rate American malls will change in the next few years.

2008 is half over, so I compared our recording activity during the past six months with the first six months of 2007. For the entire ten town district, here’s what I found:

Deeds in 2007 - 3346; in 2008 - 2630, a 21% decline
Mortgages in 2007 - 8619; in 2008 - 6500, a 25% decline
Foreclosures in 2007 - 186; in 2008 - 328, a 76% increase

Here are the same statistics just for Lowell:

Deeds in 2007 - 1095; in 2008 - 825, a 25% decline
Mortgages in 2007 - 2443; in 2008 - 1465, a 40% decline
Foreclosures in 2007 - 112; in 2008 - 203, a 81% increase

While the decline in the number of deeds recorded in Lowell is consistant with the rest of the district, the drop in new mortgages is much more pronounced. This could indicate that people living in the city are finding it more difficult to refinance or to obtain financing in the first place.

With just another hour to go today plus all day Monday, I thought we could take a glance at recording statistics for this month and compare them to the stats for June 2007. Remember, the official end of June 2008 numbers will be slightly higher than what is shown here. Still, this gives you an idea of current trends in the region. In June 2007, we recorded 671 deeds for the district including 183 from Lowell. This June (thus far), it’s been 463 and 146. In June 2007, there were 1504 mortgages for the district including 357 from Lowell. This June, it’s 941 and 260. In June 2007, there were 46 foreclosure deeds for the district including 32 from Lowell. This June, it’s 52 and 34. This last number has some significance since in May there were more than 50 foreclosures in Lowell, a record high for a single month. It’s good to see that number is back into the 30s which, although still high, is an easier number to absorb.

Execution is an ominous word, certainly when it refers to the taking of a life, but also when it deals with the taking of property. Today’s tough economic times have brought a significant increase in the number of executions being recorded by the Sherriff’s Department. For the period of January 1, 2007 to May 31, 2007, there were 243 executions recorded here at Middlesex North (with 75 of them for property in Lowell). For the same five months of 2008, the overall number rose to 317, an increase of 30% (with 101 of them for Lowell properties). Here’s a town-by-town breakdown of the 2008 recordings:

Billerica - 43
Carlisle - 1
Chelmsford - 32
Dracut - 49
Dunstable - 5
Lowell - 101
Tewksbury - 32
Tyngsborough - 13
Westford - 11
Wilmington - 22

It’s the last business day in May and the Recording Counter just shut down, so it’s time to compare this month’s numbers with May of 2007. The biggest change is in the number of foreclosure deeds recorded. (All of these comparisons are for Lowell documents only) The 51 foreclosure deeds recorded for Lowell this month are a 105% increase over the 20 recorded last May. I believe it also sets a record for the most foreclosure deeds recorded in a single month. The prior record was 44 back in 1993. The number of deeds recorded slid from 207 in May of 2007 to 158 in this May. The same thing happened with mortgages which declined from 449 last May to 261 this May, a 41% decline. One piece of potentially good news is that the number of Orders of Notice (the document that marks the beginning of a new foreclosure) declined 27% from 37 last May to 27 this May. While that could suggest that the rate of foreclosures is slowing, there are alternate explanations (Land Court is behind in processing new petitions or lenders are holding off on foreclosing hoping values will rebound, for example), so it’s not yet time to proclaim that the worst is over.

Even though there’s still a week left in May, the number of foreclosure deeds filed for Lowell thus far exceed the monthly total for all months back to mid-1994 except for March and April of this year. Last fall, it seemed that foreclosures had peaked during the summer. June, July and August had all averaged more than 30 per month, but then the numbers tapered off to the low 20s for the balance of the year. That trend continued in January and February of this year. But in March, the number of foreclosure deeds spiked to 38, a monthly amount exceed only by 39 in August 1994 and 44 in March 1993. The high volume continued through April (37) and as of today, 32 have been filed in May and that’s with five more recording days until the end of the month. Including only the May figures to date, 2008 is averaging more than 30 foreclosures per month, the highest monthly average for a year since 32 in 1993. It doesn’t take a mystic to predict that a turnaround for real estate is nowhere in sight.

Judging the direction of the housing market is a great challenge, but with the month of April now history, we can compare recording statistics for 2008 with those seen in 2007. Through the ten towns in this registry district, indications are that the market continues to slide, slightly perhaps, but slide nevertheless. The number of deeds and mortgages recorded were both down 17% (541 deeds in 2007 to 447 in 2008 and 1459 mortgages to 1206) and the number of foreclosure deeds was way up – The 29 of April 2007 grew to 67 in April 2008, a 130% rise. But that statistic is a bit misleading because we’ve known for months that those foreclosures have been in the pipeline. The positive news is that the number of Orders of Notice (the document that commences foreclosure proceedings) was down by almost 11%, slipping from 113 in 2007 to 101 this April. This trend of either steady or declining numbers (something that’s been seen since at least the beginning of 2008) of Orders of Notice being recording could suggest that the rate of foreclosures is easing somewhat.

Here at the registry of deeds it became very obvious to me in 2003 that our “volume” is driven by mortgages, especially refinances. Obviously, today mortgage volume is down, way down. Down how much? Well, according to Mortgage Bankers Association first time mortgage applications were down 28.7% last week. And the news isn’t any better for refinances either. During the same period refinances fell 38.1%. According to the Boston Globe…”the average interest rate on 30 year fixed mortgages increased to 5.75 percent from 5.74 percent the previous. This is not enough of an increase to effect the market in either direction.

Since January 1, 2008 the Middlesex North Registry of Deeds has recorded 94 Foreclosure Deeds. Here is the registry’s breakdown by town:

Billerica: 6

Carlisle: 0

Chelmsford: 6

Dracut: 12

Dunstable: 0

Lowell: 57

Tewksbury: 4

Tyngsborough: 1

Westford: 3

Wilmington: 5

2007 might have been a good year for the New England Patriots, but it was a bad year for the Massachusetts real estate market. 2007 ended with approximately 5,000 few sales than in 2006. This represents an 8.4% decrease…2007-50,435 sales; 2006-55,054 sales. These figures appeared in yesterday’s Boston Globe and were compiled by The Warren Group. December 2007 was the year’s worst month posting a 23.3% decline in sales. Median home prices also fell sharply in 2007, from $325,000 in 06 to $310,000 in 07. “The large drop in sales and median prices in December signal more woes ahead, and it remains to be seen when Massachusetts will pull out of this slump,” (Boston Globe) said Tim Warren of the Warren Group. At the Middlesex North Registry of Deeds our numbers indicate it might be awhile before things get better…In January 2007 we recorded 5,539 documents and January 2008 4,297…that’s a 28% decrease.

A comparison of some recording statistics for January 2008 compared to January 2007 demonstrates that the real estate market is still slipping.

In Jan 08, we recorded 344 deeds, in Jan 07, there were 466
In Jan 08, we recorded 862 mortgages, in Jan 07, there were 1385
In Jan 08, we recorded 68 orders of notice, in Jan 07 we recorded 56
In Jan 08, we recorded 39 foreclosure deeds, in Jan 07 we recorded 18.

The Lowell Sun contains a front page story today about the report on 2007 foreclosures in Lowell that we recently prepared. We are now preparing a similar report for the nine towns in our district. The preliminary research shows that the findings will be quite different. In Lowell, the majority of the foreclosures were of “purchase mortgages” which are those (usually there were two) mortgages used to purchase the property. In contrast, foreclosures in the towns are predominantly refinanced mortgages. As soon as this report is ready we will publish it here.