BOSTON (CBS) – The economy’s prolonged malaise, now stretching into its fourth year, is having a lopsided effect on the ultra high-end home owner.
Since 2008, payment delinquencies and foreclosure activity for $1 million-plus mortgages have skyrocketed nationally, rising to roughly double the rates recorded for home loans below that pricey threshold. And while bank and lender auctions in the Bay State have trailed off slightly in the wake of a recent regulatory crackdown on bank-foreclosure policies and procedures, they remain at historically high levels throughout many of the commonwealth¹s tonier suburbs.
For example, the city of Newton recorded 44 foreclosure auctions during the first seven months of the year, versus 49 in 2010’s corresponding period.
Wellesley and Weston reported another 11 and eight foreclosure auctions, respectively, while Hingham racked up 19.
Other high-end towns, such as Marblehead (24 auctions), Brookline (16) and Sudbury (15), are also at relative highs, according to data compiled by Banker & Tradesman in Boston.
Nantucket, a summer playground for the rich and famous, is ground zero, both because of its pricey housing stock and prevalence of vacation homes – often the first to go when household finances get tight.
Between Jan. 1 and July 31, the island saw 32 foreclosure auctions held, versus 31 in the year-earlier period.
Local real estate experts expect the numbers to worsen as the downturn drags on and banks rebound from this year’s temporary foreclosure moratorium.
In fact, the calendars at many auction houses are stuffed with pending foreclosure sales affecting the wealthy set.
Paul Talkowski, the president of Flynn Auctions in Quincy, said the state’s first wave of foreclosures – noticeable in early 2008 – tended to be “more conventional” single-family homes in lower-income cities and towns.
Lisa van der Pool of the Boston Business Journal reports
He said the recession’s toll has altered that profile dramatically, pulling more and more once-wealthy homeowners into the mix.
The trend has hit high-end housing developers particularly hard, he said.
“It’s all due to the length of the downturn.”