The Federal Reserve Bank of Boston has put together a fantastic interactive map of foreclosures and subprime loan information covering each city and town in the Commonwealth over the past two decades (thanks to the Boston.com real estate blog for the heads-up).
I transferred the data for Boston to a table, below.
Fascinating information.
Compare 2007 with 1991-1993. The foreclosure rate (loans going bad as a percentage of total housing units) is a lot less than then. We might not have seen the worst of the foreclosures, yet (although I think we have), but the rate last year was considerably less than during the worst of the 1991-1993 recession – 0.56% now versus 1.65% then. As much a result of a stronger market, perhaps, as it is due to more units of housing now versus then.
Also a big difference? The number of subprime loans written during the past couple of years. Compare the number of subprime loans to total new loans written; is there a direct correlation with the number of foreclosures, each year? You might think so, but the jury is still out. Many people who took out subprime loans during the past couple of years have been able to pay their obligations, on time. Many loans going into default (70%, by some accounts) are “prime” loans. (Subprime loans are defined for purposes of this study as “typically made at high interest rates to borrowers with low down payments, bad credit histories, and/or limited documentation of their income and assets”.)
What does this mean for the future? You tell me.
Also, make sure to click on the other tabs of the Fed report. Look at the “house-price index” now compared to 1997 and 1987. A sign of the resiliency of the Boston real estate market, or a hint of trouble on the horizon?
| Year | Subprime loans | Mtgs originated | Foreclosures | Housing units |
| 1990 | – | 9,696 | 361 | 103,803 |
| 1991 | – | 7,933 | 1,059 | 104,820 |
| 1992 | – | 11,179 | 1,752 | 104,852 |
| 1993 | 77 | 13,547 | 1,459 | 104,948 |
| 1994 | 149 | 11,071 | 1,144 | 105,077 |
| 1995 | 206 | 10,996 | 654 | 105,146 |
| 1996 | 328 | 13,752 | 532 | 105,532 |
| 1997 | 652 | 15,419 | 359 | 105,636 |
| 1998 | 1,274 | 23,554 | 219 | 106,105 |
| 1999 | 1,296 | 22,477 | 178 | 106,812 |
| 2000 | 1,187 | 17,782 | 74 | 107,845 |
| 2001 | 1,601 | 28,249 | 40 | 109,222 |
| 2002 | 1,952 | 37,468 | 42 | 110,581 |
| 2003 | 3,260 | 48,959 | 23 | 112,132 |
| 2004 | 3,957 | 39,276 | – | 114,441 |
| 2005 | 5,181 | 37,039 | 68 | 117,145 |
| 2006 | 4,793 | 31,665 | 274 | 120,046 |
| 2007 | 1,230 | 24,667 | 697 | 122,439 |
