After six years and tens of thousands of homeowners financially ruined, the foreclosure crisis in Massachusetts finally appears to have run its course, as the number of property seizures drops dramatically and home values rise steadily.
The latest figures, released Monday by a local real estate tracking firm, add to other recent evidence indicating fewer homeowners are having difficulty paying their mortgages than a year ago. A once-mountainous backlog of properties under foreclosure has been sharply pared, and a shrinking number of borrowers are receiving loan default notices.
Statewide, only 227 homes were grabbed back by lenders in March, 74 percent fewer than during that month in 2012, according to the Warren Group, a private Boston company. From January through March, completed foreclosures totaled 716, down 71 percent from the first quarter of last year.
That pales in comparison to 2008, when the real estate market was eroding here and in free fall in other parts of the country. At that time, Massachusetts lenders were seizing more than 1,000 properties a month, Warren Group data show.
“The [state’s] foreclosure crisis . . . is over,’’ said Barry Bluestone, founding director of the Kitty and Michael Dukakis Center for Urban and Regional Policy at Northeastern University.
Bluestone said Massachusetts, which suffered far less during the recession than such states as California, Florida, and Nevada, remains in a relatively strong position.
“We are on the leading edge nationwide in getting this foreclosure crisis behind us,” Bluestone said.
Timothy M. Warren Jr., chief executive of the Warren Group, had a similar take on the March figures. “We’re seeing foreclosures drop all over the country, but Massachusetts is exceptional in its reduction,’’ Warren said. Banker & Tradesman, a trade weekly published by the Warren Group, on Monday also declared an end to the state’s foreclosure crisis.
Economists and real estate industry analysts say the easing of foreclosures means a substantial drag on the housing market has been lessened. In addition to wrecking personal credit and leaving some people without a place to live, the crisis created a flood of bank-owned properties that worsened along with the recession and brought down the prices of homes that were in good standing with banks. That, in turn, discouraged prospective sellers from listing their properties and made potential buyers reluctant to pay asking prices.
Massachusetts dodged most of the ravages of the recession because it did not experience the rampant development, much of it financed with subprime loans, that took place in other states. Also, housing prices did not fall as precipitously in the state, meaning fewer owners were “underwater” on their mortgages — owing more than their homes were worth.
The latest Warren Group research shows the state’s housing market is continuing to move in the right direction, said Paul Willen, a senior economist with the Federal Reserve Bank of Boston.
Pushed by a tight housing inventory and heated interest from buyers, the median selling price of a single-family home in Massachusetts increased to $282,500 during the first three months of the year, 10.6 percent more than during the first quarter of 2012, the Warren Group said.
The prospect of gaining equity in a home is motivating more borrowers to stay current on their loans, even if it is a struggle, Willen said.
“It is not just that housing prices have gone up. It’s the expectation that they will go up further,” he said. “The acute crisis phase is over.”
But Willen said foreclosures need to decline even more. In a truly robust economy, he said, there should only be about 1,000 property seizures in Massachusetts for an entire year.
Tim H. Davis, a research consultant who analyzes foreclosure data for the public nonprofit Massachusetts Housing Partnership, said some people are still fighting to save their homes, especially in lower-income communities where property values are still languishing. As values in those places start to improve, he said, some of those homeowners will have the option of selling rather than going into foreclosure.
“The pain for some of the families may continue, but the resolutions will be easier,” Davis said.
Data released last month by the S&P/Case-Shiller Home Price Indices, which tracks repeat home sales in 20 US cities, found values in the Boston area are still down nearly 16 percent compared with the market’s peak in 2005. Nationwide, home values remain off by about 29 percent from their height.
Attorney General Martha Coakley warned Monday that public officials “shouldn’t be declaring ‘mission accomplished’ just yet” regarding foreclosures. Coakley was a key negotiator in last year’s national $26 billion settlement with the country’s top five major banks that was intended to offer relief to homeowners and stem foreclosures.
“There are thousands of homeowners still struggling to avoid unnecessary foreclosures, and that work must continue before declaring victory over the foreclosure crisis,” she said.
Last week, she complained that US lenders are sending borrowers inaccurate and confusing information and denying aid without specifying why.
But based on Monday’s Warren Group data, those may not be widespread issues in Massachusetts over coming months. The company reported just 284 foreclosures were initiated in March, 82 percent fewer than during March 2012. And for the first three months of the year, 2,080 homes were entered into the foreclosure process, a 52 percent drop from 2012.Mark Pothier of Globe staff contributed to this report. Jenifer B. McKim can be reached at firstname.lastname@example.org. Follow her on Twitter @jbmckim.