‘Zombie’ Foreclosures Down 43% From Year Ago

RealtyTrac, Irvine, Calif., reported just over 20,000 “zombie” homes in the foreclosure process in the third quarter, down by 27 percent from the second quarter and down by 43 percent from a year ago.  

The company’s U.S. Zombie Foreclosure and Vacant Property Report reported 20,050 U.S. residential properties in the foreclosure process–but not yet repossessed by the foreclosing lender–as of the end of the third quarter. These properties accounted for 1.3 percent of all vacant U.S. residential properties, with bank-owned homes accounting for another 1.9 percent.  

The report showed 1.5 million vacant U.S. residential properties, representing 1.8 percent of all 84.7 million U.S. residential properties. Among these vacant properties, 36.5 percent have at least one open loan and 6.2 percent are seriously underwater, meaning the combined value of loans secured by the property is at least 25 percent more than the estimated market value of the property.  

“What is surprising is there are so many vacant homes where the homeowners do not appear to be in financial distress,” said Daren Blomquist, vice president with RealtyTrac. “The fact that the homeowners are not selling given the recovering real estate market in most areas indicates that many of these properties are in poor condition and in neighborhoods that have been left behind by the housing recovery.”  

States with the most vacant “zombie” foreclosures were New Jersey (3,997), Florida (3,512), New York (3,365), Illinois (1,187) and Ohio (1,028). States with the highest share of vacant “zombie” foreclosures as a percentage of total vacant properties were New Jersey (9.4 percent), New York (8.2 percent), Nevada (2.7 percent), Massachusetts (2.5 percent) and Illinois (2.1 percent). Only six states posted a year-over-year increase in zombie foreclosures, including Massachusetts (up 66 percent) and New Jersey (up 29 percent).      

The report said among metropolitan statistical areas with at least 100,000 total residential properties, those with the most vacant “zombie” foreclosures were New York (3,531), Philadelphia (1,610), Chicago (989), Tampa (984) and Miami (866). Major metro areas with the highest share of vacant “zombie” foreclosures as a percentage of all vacant properties were Rochester, N.Y. (14.3 percent), Trenton, N.J. (10.5 percent), New York (10.0 percent), Albany, N.Y. (7.9 percent), and Allentown, Pa. (5.2 percent).  

Among the 147 metro areas with at least 100,000 total residential properties, 21 posted a year-over-year increase in vacant foreclosures, including Boston (up 61 percent), Worcester, Mass. (up 43 percent), St. Louis (up 16 percent), Philadelphia (up 15 percent), and Trenton, N.J. (up 11 percent).  

States with the most total vacant residential properties were Florida (180,846), Michigan (117,833), Texas (117,350), Ohio (86,416) and California (80,750). States with the highest percentage of vacant residential properties were Michigan (3.9 percent), Indiana (3.0 percent), Mississippi (2.8 percent), Florida (2.7 percent) and Alabama (2.6 percent). States with the lowest percentage of vacant residential properties were South Dakota (0.3 percent), New Hampshire (0.4 percent), Vermont (0.5 percent), North Dakota (0.5 percent), Montana (0.8 percent) and Washington (1.1 percent).  

Among metropolitan statistical areas with at least 100,000 total residential properties, those with the most vacant residential properties were Detroit (84,291), Miami (67,139), Chicago (48,181), Atlanta (36,396), and New York (35,200).  

Major metro areas with the highest percentage of vacant residential properties were Flint, Mich. (7.5 percent), Detroit (5.5 percent), Youngstown, Ohio (4.4 percent), Beaumont-Port Arthur, Texas (4.2 percent) and Atlantic City, N.J. (4.1 percent). Those with the lowest share of vacant residential properties were San Jose, Calif. (0.3 percent), Fort Collins, Colo. (0.3 percent), Manchester, N.H. (0.4 percent), Lancaster, Pa. (0.4 percent), and Fayetteville, Ark. (0.4 percent).  

The report said states with the most vacant properties seriously underwater were Florida (16,723), Ohio (9,237), Illinois (7,397), New Jersey (6,306) and California (5,187). States with the highest percentage of vacant homes underwater were New Jersey (14.9 percent), Maryland (13.1 percent), Illinois (12.9 percent), Nevada (11.7 percent) and Ohio (10.7 percent).  

Among metropolitan statistical areas with at least 100,000 total residential properties, those with the most vacant residential properties seriously underwater were Chicago (6,638), Miami (5,546), New York (3,952), Detroit (3,739), and Cleveland (3,488).  

Major metro areas with the highest share of vacant homes underwater were Trenton, N.J. (21.4 percent), Columbus, Ohio (19.1 percent), Cleveland, Ohio (17.2 percent), Fresno, Calif. (16.5 percent) and Atlantic City, N.J. (15.2 percent).