ATTOM: Zombie Foreclosures Increase

Vacant residential properties increased 1.3% in the second quarter to 1.28 million houses, reported ATTOM, Irvine, Calif.

ATTOM calls such properties “zombie foreclosures.” The firm’s second-quarter 2023 Vacant Property and Zombie Foreclosure Report found one in 79 homes across the nation is a zombie foreclosure.

The report analyzed publicly recorded real estate data including foreclosure, equity and owner-occupancy status matched against monthly updated vacancy data. It noted 311,508 residential properties in the U.S. were in the process of foreclosure in the second quarter, up 4.3 percent from first-quarter 2023 and up 20.2 percent from second-quarter 2022. “A growing number of homeowners have faced possible foreclosure since a nationwide moratorium on lenders pursuing delinquent homeowners, imposed after the Coronavirus pandemic hit in early 2020, was lifted in the middle of 2021,” the report said.

Among those pre-foreclosure properties, 8,752 sit vacant as zombie foreclosures (pre-foreclosure properties abandoned by owners) in the second quarter. That figure is up 7.5 percent from the prior quarter and up 15.6 percent from a year ago. The count of zombie properties has grown in each of the last five quarters, dating back to early in 2022.

Still, the number of zombie foreclosures remains historically low, with little impact on the nation’s total stock of 101.3 million residential properties, ATTOM said.

“Zombie foreclosures keep inching up as lenders pursue more delinquent homeowners in courts around the country,” said ATTOM CEO Rob Barber. “All indications are that the number of zombie properties will keep going up slowly, given that foreclosures are up.”

But Barber called abandoned properties “nothing more than a dot on the radar screen’ among most neighborhoods. “We are still a long way from the fallout after the Great Recession of the late 2000s, when this was a very real issue in many areas around the U.S.,” he said.