Foreclosures are down, but rent costs are up in Boston
For years, foreclosure proceedings plagued Massachusetts and the other 49 states. When new reports show signs of a diminishing trend in foreclosure, buyer confidence improves greatly. Fortunately, a new report from the Warren Group shows just that - lenders initiated 1,198 foreclosure proceedings in the Bay State in July 2012, the lowest monthly level recorded in 2012.
Foreclosure starts fell almost 17 percent when compared to figures from July 2011, the source reports, and the data points toward a recovering Boston housing market.
"It appears there is a downward trend in foreclosure activity," the Warren Group chief executive Timothy M. Warren Jr. said in a statement. "A strong economy and recovering housing market is helping lift consumer confidence. This news paired with banks' return to standard foreclosure processes is also helping."
In addition to a decline in foreclosure starts, the last step in the overall process (deeds) also fell 17 percent year-over-year in July. This reading was the month with the fewest foreclosures since May 2011, according to the Warren Group.
Foreclosure decline isn't the only positive sign of recovery in MA
Hub residents will find that it is more affordable to buy real estate in Boston than rent. Recently, the Boston Globe ran a story that reported on recent calculations showing that the average monthly rent in Boston is $2,256. This is a markedly larger sum than the monthly expenses of buying a home in the area, which costs $1,338. In fact, the report claims it is nearly 41 percent cheaper to buy in Boston than rent. According to the article, the average Boston worker would need to save 10 percent of his or her paycheck for 12.1 years in order to afford a 20 percent down payment, which is the number one reason many prospective buyers hesitate to invest in property.
Boston real estate costs may seem excessive on the outside, especially with U.S. employment figures still in less-than-favorable territory, but over the long term, it's more cost-effective to buy than rent. Homebuyers who need that extra push to jump into the market and purchase a starter home might take solace in knowing prices have increased slightly in 2012. According to the Department of Numbers, Boston's median asking price is $329,414 - up 0.1 percent year-over-year. With foreclosures in decline, prices might increase even more down the road.