The Commonwealth of Massachusetts

THE STATE OF HAMPDEN COUNTY

REGISTERS RELEASE AND FORECAST
J ULY 2014


THE TOTAL AMOUNT OF MONEY SPENT ON REAL ESTATE IN HAMPDEN
COUNTY DURING FISCAL YEAR 2014 WAS $1,156,955,500.00, A 17% INCREASE
OVER THE PRIOR FISCAL YEAR. THE NUMBER OF DOCUMENTS RECORDED
DURING FY14 WAS 74,247, A 16% DECREASE FROM THE PRIOR FISCAL
YEAR. THE AMOUNT OF FEES AND CHARGES COLLECTED DURING FY14
WAS $12,193,772.58, A 6% DECREASE FROM THE PRIOR FISCAL YEAR.
_______________________________________________________________________

REGISTERS FORECAST

For a number of economists, the question is not when the national economy will recover
completely; it is if the economy will completely recover. Economic growth has never
been weaker after any other recession since World War II. During the past five years,
1.85 million low paying jobs have been created while 1.83 million medium ($13-$20 per
hour) and high ($20-$32 per hour) paying jobs have been eliminated. Job growth is still
more concentrated in lower paying industries making it difficult, if not impossible, for
many of those individuals to purchase a home.

Nationally, housing sales are slipping just when many of us thought it would be
improving. In Hampden County, the number of real estate documents recorded in FY
2014 decreased by 16 percent, and the amount of fees collected decreased by 6 percent
from the prior fiscal year. However, an increase in property values during the past two
years did cause the amount of money spent on real estate to exceed a billion dollars, a 17
percent increase over FY 2013.

While there may be a number of reasons for a weak housing market, it is not due to
higher interest rates. Interest rates are still at record low levels and are lower today than
they were prior to the great recession when home sales were strong. In FY 2006, with
interest rates in the 6.5 percent range more deeds were recorded, more fees were
collected, and more money was spent on real estate in Hampden County than in FY 2014.
The problem isnt higher interest rates; it is due to housing prices rising faster than
income. Prior to the recession, economic growth was keeping up with higher sale prices,
but that is not the case today. Although the unemployment rate in Hampden County has
dropped to 7.1 percent, those individuals who have returned to work locally and
nationally are receiving lower incomes than prior to their unemployment, therefore
pricing them out of obtaining new mortgages under the new guidelines.

Another factor affecting the housing market is the decrease in the number of new
household formations since 2007. According to census data, the number of new
households only increased by an average of 569,000 from 2007 to 2013, down from an

average of 1.35 million per year from 2001 to 2006. Before the recession, 27 percent of
the 18 to 30 year olds lived with their parents while today it is 34 percent.

Creating economic growth with better paying jobs consistent with rising costs is critical
to achieving a healthy housing market. However, we should see some improvement in
housing sales during fiscal year 2015 while interest rates remain low and home sale
prices begin to stabilize. The national unemployment rate is 6.3% with 9.8 million people
unemployed, and the Massachusetts rate is 5.6%. The unemployment rate in Hampden
County in April 2014 was 7.1% compared to 8.2% in April 2013. The 30-year fix rate
mortgage ranges from 4.2% to 4.5%.

_____________________________
Donald E. Ashe, Register
_______________________________________________________________________

During FY2014, residential property values for all of Hampden County increased by 1
percent over the prior fiscal year. Some of the communities in the County had substantial
increases; Southwick 22 percent, Ludlow 12 percent, and Westfield 10 percent. The
average amount of a residential property for all of Hampden County was $181,201.04.
Springfield which had the lowest property value of all the larger communities was
$118,664.22 while Holyoke was $172,421.20 and Westfield was $210,227.75.

Homeowners are continuing to recover equity lost during the great recession as property
values increase. However, as price appreciation slows, so also will the road back to
positive equity for millions of homeowners that are still underwater. Today
approximately 17% of the nations homeowners with mortgages are underwater.
Homeowners who are considered to be underwater owe more on their mortgage than their
property is worth. Property values in Hampden County are beginning to stabilize and that
will help to make home prices more affordable. However, it will also keep a homeowner
with negative equity from being able to sell a home and purchase another one.

In the documents section of our year-end report, we are now showing both the number of
actual foreclosures recorded as FORECLOSURES and the number of foreclosure
petitions filed each year as ORDER OF NOTICE/FORECLOSURES. The foreclosure
petition is the first step in the foreclosure process and is required by federal law. Often
the foreclosure petition can be both the first and last notice of a pending foreclosure if the
mortgage default is cured or the property is sold. In FY2013 in Hampden County there
were 1251 foreclosure petitions filed and only 396 recorded. In FY 2014 there were 607
foreclosure petitions filed and only 364 recorded.

While the number of foreclosures is decreasing, the time between a foreclosure auction
and the recording of the foreclosure deed is increasing dramatically, on the average 200
days. We believe the delay may be due to the more rigid lending requirements and the
banks reluctance to accept lower bids.

We are in the process of rescanning more than two hundred old record books to improve
their online images and to preserve the integrity of the books. The images are also being
microfilmed to replace aging and deteriorating microfilm which is kept offsite.

REVENUE

Source Fiscal Year End
2013
Fiscal Year End
2014
% Change

Recordings $ 6,071,205.00 $ 4,942,225.00 -19%
Deed Excise Tax $ 4,503,984.96 $ 5,275,717.08 17%
Land Registration $ 320,475.00 $ 264,894.00 -17%
Internet Access $ 24,755.75 $ 14,420.00 -42%
Photocopies $ 9,128.00 $ 5,646.50 -38%
Plans $ 18,400.00 $ 24,800.00 35%
Surcharge $20.00 $ 1,460,480.00 $ 1,231,600.00 -16%
Surcharge $10.00 $ 84,840.00 $ 67,180.00 -21%
Surcharge $ 5.00 $ 437,580.00 $ 367,290.00 -16%

Total Revenue $12,930,848.71 $12,193,772.58 -6%


DOCUMENTS

Source Fiscal Year End
2013
Fiscal Year End
2014
% Change

Attachments 77 64 -17%
Deeds 9,187 8,897 -3%
Discharges 18,924 13,847 -27%
Executions 1,087 929 -15%
Foreclosures 396 364 -8%
Homesteads 6,008 5,160 -14%
Mortgages 16,866 12,097 -28%
Order of Notice /
Foreclosures
1,251 607 -51%
Miscellaneous 34,709 32,282 -7%

Total Documents 88,505 74,247 -16%

TOTAL AMOUNT SPENT ON REAL ESTATE: $1,156,955,500.00