Condo Prices Jump Most in Affordable Areas; Foreclosures Mount

BOSTON-Reports from ForeclosuresMass Corp. and the Boston Department of Neighborhood Development revealed that foreclosures are increasing by double digits throughout Massachusetts and Greater Boston. The Boston report also shows that, throughout the city, sales prices of condos, which represented 67% of all 2005 residential sales, rose just 0.2%, versus a 4.6%-increase in single-family homes. However, condo prices in the city's most affordable neighborhood in 2004, East Boston, jumped 18.9%, a steeper 2005 increase than occurred in condo sales in any of the 14 other neighborhoods.

The median price of a condo in East Boston rose from $219,000 in 2004 to $260,287 a year later, according to the report. At the same time, the median price of a condo in Central Boston increased to $525,000, up 15.3% from the previous year, and the median condo sale in Back Bay/Beacon Hill hit $525,000, a 9.4%-rise for the year. The lowest increase, 0.3%, occurred in Jamaica Plain, where the median condo sale reached $324,900 at year-end 2005. At that time, Mattapan registered the lowest median condo sale price of all Boston neighborhoods, $237,500, up 8% from its median in 2004.

Citywide, median advertised asking rental rates for a two-bedroom apartment rose 7.9% during 2005 to reach $1,700 a month. The median was lowest, $1,100 a month, in East Boston, unchanged from 2004. The median rent of $1,200 a month in both Mattapan and Roxbury was down 4% from the median in 2004. And the 2005 median of $1,225 a month in Fenway/Kenmore represented an 18.2%-decline from the previous year. By contrast, the 2005 median of $2,200 a month in South End represented a 12.8%-hike over the year before.

The total number of housing foreclosures throughout the city jumped 100% in 2005, mirroring the 2004 increase. Of this year's number, condominiums accounted for 38.3%, with the remainder split among one-, two- and three-unit residential properties, according to the city department's report.

Statewide, "the shortest month of this year produced more foreclosure filings than any other month in the past three years," says Jeremy Shapiro, president and co-founder of Framingham-based ForeclosuresMass. In February 2006 they were up 63% versus the same month two years ago, he reports. For the 12-month period ended Feb. 28, 2006, they increased nearly 31.5%.

Among Massachusetts' counties, the sharpest increases for the 12-month period were 51% in Barnstable and Essex and 50% in Nantucket. Among towns and cities, Avon and Harwich topped the list with increases of 267% and 250%, respectively, and Rockport, Hamden and Manchester all registered increases of between 217% and 200%.

Spokespeople for both reporting entities attribute the rise in foreclosures primarily to the earlier proliferation of interest-only mortgages and low-rate introductory periods on mortgages. These now combine with rising interest rates, stagnant wages and rising health care costs.