RealtyTrac, a source for comprehensive housing data, released its Q3 2015 U.S. Zombie Foreclosure and Vacant Property Report, which shows 20,050 U.S. residential properties in the foreclosure process — but not yet repossessed by the foreclosing lender — were vacant “zombie” homes as of the end of the third quarter of 2015, down 27 percent from the previous quarter and down 43 percent from a year ago.
Vacant residential properties in the foreclosure process accounted for 1.3 percent of all vacant U.S. residential properties, with bank-owned homes (REO) accounting for another 1.9 percent of all vacant 1 properties as of the end of the third quarter.
The report shows a total of 1.5 million (1,500,456) vacant U.S. residential properties, 1.8 percent of all 84.7 million U.S. residential properties. Among the 1.5 million vacant residential 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.
“The overall inventory of homes in the foreclosure process has dropped 36 percent over the past year, so it’s not too surprising to see a similarly dramatic drop in vacant zombie foreclosures,” RealtyTrac Vice President Daren Blomquist said. “What is surprising is there are so many vacant homes where the homeowners do not appear to be in financial distress — with only 3 percent in foreclosure or bank owned, and only 6 percent that are underwater. More than 63 percent of these vacant homes are not even encumbered by a loan, owned free and clear by the owner. 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.”
Markets with most vacant ‘zombie foreclosures’
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, most notably Massachusetts (up 66 percent) and New Jersey (up 29 percent).
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).
“The zombie foreclosure crisis has for all practical purposes evaporated in South Florida. The vacant foreclosure numbers are a minimal 4.2 percent of foreclosures in the area,” said Mike Pappas, CEO and president of the Keyes Company, covering the South Florida market. “We have seen this number drop precipitously over the past few years. Due to our strong second home and international buyer market we do have a large number of properties that are not always occupied but are well maintained.”
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, there were 21 that bucked the national trend and posted a year-over-year increase in vacant “zombie” 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).
For more information on this report visit www.RealtyTrac.com.