Worcester Business Journal Special Editions

32 2015 Central Mass By The Numbers • Worcester Business Journal www.wbjournal.com Real Estate Source: Colliers International Office vacancy rates (2nd quarter 2015) Source: Mass. Department of Revenue Top commercial/industrial property tax rates in Central Mass. Per $1,000 property valuation; rates are for fiscal 2014 (July 1, 2013 to June 30, 2014): 0 5% 10% 15% 20% 25% 14.8% 10% 17.2% 18.7% Route 128 Inner Suburbs of Boston I-495 Suburban Boston Worcester $38.99 Framingham Hudson Maynard Worcester Milford Clinton Littleton Ayer Marlborough Fitchburg Hopedale Sudbury Berlin Auburn Ashburnham $35.92 $31.73 $31.24 $31.09 $30.26 $29.97 $29.89 $27.43 $26.69 $26.35 $24.88 $23.91 $23.26 $22.28 20.9% 0 5% 10% 15% 20% 25% 14.8% 10% 17.2% 18.7% Route 128 Inner Suburbs of Boston I-495 Suburban Boston Worcester $38.99 Framingham Hudson Maynard Worcester Milford Clinton Littleton Ayer Marlborough Fitchburg Hopedale Sudbury Berlin Auburn Ashburnham $35.92 $31.73 $31.24 $31.09 $30.26 $29.97 $29.89 $27.43 $26.69 $26.35 $24.88 $23.91 $23.26 $22.28 20.9% T he Massachusetts real estate market never exactly bounced back from the crisis that spurred on the Great Recession. The market has slowly been making gains, with prices rising gradually. There are some markets – such as the multi-family housing market and nearly every- thing in Boston – where the prices are rising more steeply, but overall this has been a recovery high- lighted by gradual increases, not a huge shot up to pre-2008 levels. One area that has seen a spike in the last year, how- ever, is foreclosures. Central Massachusetts has seen its foreclosures rise by 27.5 percent in the last year, according to our numbers. This is in contrast to the previous year, where there was a reduction. Foreclosures have long served as a canary in the coal mine, said Tim Warren, foretelling of the real estate crash in 2008, and it is understandable that people would be alarmed by these numbers. These numbers are not something to get worked up over, Warren said. This latest uptick indicates house- keeping of a buildup of delinquent mortgages more than anything else. "For the last year or more, the monthly percentage gain from the same month in the prior year has looked dramatically higher. It looks alarming," Warren said. "As best we have been able to discern, the reason for this is there were a lot of delinquent mortgages that weren't being processed in the prior years." Banks did not want to take possession of the prop- erties in a slow-growth market where owning the properties means maintenance and upkeep while looking for a buyer. There have also been a great deal of regulatory changes, Warren said, with laws being put in that delayed foreclosures. Banks were hesitant to move forward as laws around foreclosures continued to evolve, changing in Massachusetts from a 90-day to a 150-day moratorium before initiating a foreclosure. Another provision forced lenders to consider alter- natives to foreclosure and determine what is more economically feasible for the lender, Warren said. These rules were not just at the state level either, with federal regulations being made about loan modifica- tions and court cases being heard challenging differ- ent policies and procedures. "All of that combined gave the lenders the feeling that a go-slow policy was the best one," Warren said. Most lenders took a wait-and-see approach until things were crystal clear. This meant that banks were putting off foreclosures rather than getting caught up in these still solidifying laws and regulations, Warren said. Now that expecta- tions surrounding foreclosures have solidified, banks have begun moving forward to clean out the backlog that had built up. "A lot of the loans that are going through the fore- closure now are loans that have been delinquent for a long time," Warren said. Some people have continued to live in the house even after going delinquent on the payments. So while the concern is understandable, the boost to foreclosures has not been growing month-to- month, rather representing a baseline increase com- pared to each month from the previous year, he said. This is a banking adjustment and housekeeping, not a growing trend. "We have a good real estate market. We have a good economy with growing job numbers … all of that leads me to believe things are pretty much in balance," Warren said. n By Sam Bonacci Worcester Business Journal Staff Writer Home foreclosures up sharply QUICK HITS Sources: Mass. Department of Revenue, U.S. Census Bureau, RealtyTrac.com Total assessed value of all Worcester property: $11.2B Building permits in 2014 for single- family homes in Westborough: 56 Increase in total Central Mass. single-family home construction costs from 2013 to 2014: 12% Total Central Mass. foreclosures from September 2014 to August 2015: 895 Percent of tax-exempt property in Boxborough, the lowest in Central Mass.: 3.6%

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