Home Foreclosure Rigor Mortis sets up for “Zombie Foreclosures” – RISMedia

Rigor Mortis sets up for “Zombie Foreclosures” – RISMedia

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In films about the rise of the living dead, whether raised by dark powers, an alien mushroom, or a rogue supervirus, zombie armies almost always have one thing in common: they move slowly.

In the real estate industry, that trope also appears to be true, with the march of so-called “zombie foreclosures” barely budging this quarter, according to a pre-Halloween report from ATTOM Data Solutions, although this metric will inevitably grow over the long term.

“Zombie seizures are on hold this quarter, at least for now,” Todd Teta, product manager at ATTOM, said in a statement. “They’re still totally off the radar screen in most parts of the country, with none in most neighborhoods… depending on how quickly cases go through the courts, it’s probably only a matter of time. before the zombie properties start to come back into the mix. “

Zombie foreclosures – both vacant and foreclosed properties – currently account for 3.3% of all foreclosed properties, which is actually down a fraction of a percent from the third quarter of this year. year. Fewer than 7,500 residential properties nationwide are “zombies” by this definition, even as foreclosures have increased overall.

According to ATTOM, 223,256 homes are currently under foreclosure, up 3.6% from last quarter and 11.6% from the same quarter of 2020, as the end of federal protections in September allowed more banks to start bringing defaulting borrowers to justice. . At the same time, overall vacancy rates edged down as demand for housing kept homes from sitting empty.

One in 75 establishments in total, or 1.33%, was vacant in the fourth quarter of 2021, up from 1.56% a year ago. Investor-owned properties were more than twice as likely to be vacant, according to the report, with 3.4% of the 27 million institution-owned homes vacant.

Rich Sharga, executive vice president of ATTOM’s RealtyTrac subsidiary, attributed the lack of abandoned properties to historic home price appreciation and continued desire for homes, although the market has cooled slightly in recent months. .

“Market dynamics – strong demand coupled with a historically low inventory of homes for sale – suggests that we shouldn’t see a significant increase in zombie foreclosure properties anytime soon, even with increasing foreclosure activity,” he said. he said in a press release. “Most financially struggling homeowners should be able to sell their homes rather than going through a lengthy foreclosure process where they end up giving up the property. “

Army of the dead

Zombie properties often end up being run down, ugly spots in a neighborhood – potentially a sign of bad things to come in the area, as almost all homeowners would rather sell a foreclosed home rather than abandon it. Fortunately, this has not yet spread widely across the country, with half of all US states seeing an overall decline in zombie properties from last quarter.

But a few subways and regions have seen an alarming concentration of abandoned homes, with the top five qualifying subways seeing their share of “zombie” properties reaching over 10%. These cities are:

– Portland, Oregon – 15.3%
– Wichita, Kan. – 15%
– Cleveland, Ohio – 11.7%
– Fort Wayne, Indiana – 11%
– Honolulu, Hawaii – 10.6%

A few states also continue to have a disproportionate share of zombie foreclosures, including New York with 2,049 total properties, Ohio with 925, Florida with 907 and Illinois with 758, according to the report. Broome County in New York has the questionable distinction of the highest proportion of zombie foreclosures to total property count, with one in 640 homes abandoned and foreclosed (compared to one in 13,292 nationwide).

New Jersey appears to be a safe zone against the spread of zombies, with four of the five counties with the lowest number of zombie seizures. These countries are Atlantic County, Mercer County, Bergen County, and Morris County, all with less than 1% of seizures in zombie status.

Overall, zombie seizures remain concentrated in the Midwest and Northeast, according to ATTOM.

Jesse Williams is the Associate Online Editor of RISMedia. Send him your ideas for real estate news by email at [email protected].


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