Foreclosure actions on Cape Cod are showing their first decrease in four years, aided by a red-hot housing market that's making it easier for distressed homeowners to offload their property before losing it to the bank.
According to data compiled by The Warren Group, foreclosure petitions for the first six months of the year totaled 322 in Barnstable County, down 11 percent compared with the first half of 2016. Statewide, the 5,783 petitions filed through June and were down 12.6 percent compared with last year.
The median price of single-family homes hit $395,000 in the state in June — $400,000 on the Cape, according to the Cape Cod and the Islands Association of Realtors — and the inventory of available homes continued to shrink, making it a strong seller's market for anyone trying to offload a home.
"Higher prices, and consistently rising prices, tend to tamp down foreclosure activity," said Timothy Warren Jr., CEO of the Warren Group. "If someone bought a house five years ago, it's probably worth more than what they bought it for. They should be able to sell it as opposed to going through a foreclosure."
The recent totals of foreclosure petitions, which is when lenders file notice of their intention to foreclosure in Land Court, is still far lower than its 2010 peak at the height of the Great Recession. But until this year, the totals had increased ever year since 2013, when petitions hit a post-recession low, the data show.
"That's the only year in recent years they had been in decline," Warren said of 2013. "That was a year when lenders clearly said 'Let's call a time out here.' They were getting hammered by court decisions and politicians who didn't want to see more foreclosures."
Home prices were also depressed, Warren said, meaning banks that foreclosed would have had a harder time making their money back.
"If they took in foreclosures, they had to be more responsible about it," he said.
The increases since then have represented a "clearing out" of the foreclosure backlog that resulted, Warren said, and aren't necessarily indicative of ongoing financial problems for homeowners.
"We still have a lot of mortgages that are in the pipeline that are delinquent," he said. "I suspect some of them have been in delinquency for quite a while."
The number of foreclosure auctions also dropped both statewide and on the Cape, each by 18 percent, according the Warren Group data. Filing of foreclosure deeds, the final step in the process, was up statewide nearly 7 percent and was up 300 percent on the Cape, a sign that the backlog of auctions was continuing to be resolved.
Ryan Castle, CEO of the local Realtors association, said that the tightening inventory locally — only 2,200 single-family homes were on the market in June, down 28 percent from June 2016 — and rising prices are definitely playing into the local foreclosure declines.
"People needing to sell are able to sell before the property becomes distressed," he said. "They're getting some more money for it than they would before."
The tight inventory also means that foreclosures are becoming a slimmer option for home hunters to snag a bargain on the market, although Castle said those properties required a buyer more willing to invest money and sweat equity in the property.
"Foreclosures aren't usually move-in ready," he said. "It takes someone willing to take on that work."
