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The communities in around Boston that have traditionally been the lower income areas are seeing a gentrification and housing prices that are increasing at a double digit rate. The communities at the same time are seeing other homeowners being foreclosed upon as adjustable rate mortgage holders are looking at significant increases in their mortgage payments.

Boston has been in the forefront of the housing market bubble and subsequent decline. It is worth watching how these communities react and come through the bubble  as a blue print or warning for others.

The Boston Department of Neighborhood Development reported yesterday that median house prices rose 10 percent to 17 percent during 2005 in East Boston, Mattapan and Roxbury. That’s comparable to gains in toney Back Bay/Beacon Hill, where median prices shot up 14 percent to top $2 million for the first time ever.

Experts attribute price hikes in once-inexpensive areas to demand from house-seekers completely locked out of fancier locales. But at the same time, figures also show a rising number of Hub homeowners in mortgage trouble. The city said banks seized 60 Hub residences last year for mortgage non-payment - a 140 percent increase from 2004.

An even larger number of properties faced “notices of default,” the first step banks take when homeowners fall behind on loans. Citywide, 385 homes faced such notices in 2005 - a 53.5 percent rise from 2004. Problems particularly worsened in traditionally working- and middle-class neighborhoods, with default filings doubling in Hyde Park, Roxbury and Jamaica Plain. via the Boston Herald

Related posts:

1. Subprime Loans Lead to High Foreclosure Rate in Massachusetts
2. Floridians Optimistic Double Digit Growth Will Continue - Florida Real Estate
3. 30 Year Mortgage Rate Hits 2 1/2 Year High
4. The Later The Subprime And Alt-A Loan, The Greater The Default Rate
5. Bay Area Forclosures Rise Dramatically