I believe that the sharp reduction in sales in Massachusetts is specifically due to the uncertainty of buying out of foreclosure there.  It appears that foreclosure activity at all levels has ground to a crawl in the state.  It's no secret that across the country the foreclosure market has been depressed in comparison with the non-foreclosure market because of uncertainty of title out of foreclosure-- but Massachusetts obviously has the distinct issue that potential buyers and lenders in foreclosure sales are effectively on notice that they could have a foreclosure sale voided.

The other half of the story was in another press release put out by the Warren Group, which is the research firm that was partly the basis for the Globe article.

For the month of April, Massachusetts foreclosure activity remained at levels dramatically below those recorded last year. However foreclosure petitions, which mark the first step in the foreclosure process in Massachusetts, posted the highest number so far this year.

 

The number of foreclosure petitions statewide dropped almost 51 percent year-over-year to 1,192 from 2,431 in April 2010.  In the three previous months, petitions have ranged from 694 to 1,048. This was the highest level of petitions since September, when there were 2,358 starts. Through April of this year, 3,727 petitions to foreclose have been filed statewide, down 58.6 percent from 9,008 during the same period in 2010.

 

"Lenders are still taking a cautious approach to foreclosures, and this is keeping foreclosure statistics at low levels for a while longer," said Timothy M. Warren Jr., CEO of The Warren Group. "This brief downturn should not sway us from the reality that the foreclosure crisis is not over, and we are likely to see more activity work its way through the system. The increase in petitions from March to April shows that foreclosure activity has picked up a bit again, and we are likely to see increases in coming months."

 

Foreclosure deeds, which represent completed foreclosures, decreased more than 62 percent to 518 in April from 1,375 in April 2010. A total of 2,111 foreclosure deeds have been recorded in the first four months of the year, down 56.2 percent from 4,824 a year earlier.

 

The number of advertised auction notices also dropped significantly. There were 1,382 auction announcements in April, down 51.7 percent from 2,861 a year ago. Year-to-date auction notices decreased almost 58 percent to W4,675 from 11,114 last year.

 

This would indicate that foreclosure sales have also been cut in half or more since last year.  So if sales overall are down only 20%, that means that would tend to lead to a conclusion that regular non-foreclosure sales are not doing that badly, and that it is perhaps entirely the foreclosure market that is making these stats look so bad.  When I see for instance that condo prices are actually up while sales numbers are way down, it tends to lead me to believe that what has really happened is that foreclosure sales of condos have probably just all but evaporated in Massachusetts.

Realtors and others in Massachusetts who chalk up the decline to the tax credit expiration are missing half the picture, I think.  The Warren Group should have mentioned the effect of the uncertainty in the foreclosure market in the other press release.