RadioBDC Logo
Go! | M83 Listen Live
< Back to front page Text size +

Brace yourself for the 2011 foreclosure tidal wave

Posted by Scott Van Voorhis December 16, 2010 07:06 AM

E-mail this article

Invalid E-mail address
Invalid E-mail address

Sending your article

No, I haven't lost it - I've read the news this morning about the huge drop in foreclosures.

Sorry if I'm not celebrating as I sip my morning coffee.

Sure, for some struggling homeowners, the temporary halt - foreclosure activity is off by a third since September as banks have taken a step back amid the robo-signing mess - is a badly needed reprieve.

But we are looking at some serious trouble for the real estate market as a whole just a few months down the line.

In fact, RealtyTrac is already predicting another fall in foreclosure activity when the December numbers come out, followed by a spike during the first quarter. Just in time for the start of the spring market.

In fact, foreclosures will surge to new highs in 2011, beating even the 1.2 million home seizures expected for 2010 and the 900,000 recorded in 2009, RealtyTrac's Rick Sharga has been telling reporters.

If the big decline we are now seeing in foreclosure activity is any indication, we should be in for one heck of a spike come February and March.

Foreclosure activity, from initial filings by lenders to seizures of homes, fell off the cliff in November, rocketing down 21 percent from October and 14 percent from a year ago. Here in the Bay State, foreclosure activity is off even more dramatically, plunging 61 percent from October and more than 41 percent from November, 2009,

It was the biggest drop RealtyTrac has recorded since it started tracking distressed homes in 2005, when the foreclosure crisis, as we know it, began to take flight.

Yet the vast majority of this drop is tied in with the robo-signing mess, which saw banks across the country temporarily halt foreclosure proceedings as they sorted out paperwork problems.

The banks, though, appear to be fast on their way to making whatever superficial paperwork changes they need to get back to the business of lowering the boom on homeowners who have defaulted on their payments.

Bank of America has already begun pushing ahead with foreclosure proceedings after freezing activity back in October as the robo-signing controversy exploded. And the bank has said it expects to ramp up the pace of foreclosures starting in January.

So it's likely to take a month or two for the foreclosure machine to get back up to speed.

But if you want a roadmap of what's to come, just look at the way the home buyer tax credit massively distorted the market. It artificially pumped up sales only to send them plunging off a cliff when the credit went kaput April 30th.

Well get ready for another roller coaster ride, with a spring flood of foreclosures swamping the market.

This blog is not written or edited by or the Boston Globe.
The author is solely responsible for the content.

E-mail this article

Invalid E-mail address
Invalid E-mail address

Sending your article

About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

Latest interest rates

RE by the Numbers
South Shore Market Rankings - January 2016
Today we once again check in with towns and neighborhoods South of Boston and rank their real estate markets. As always we are looking at...