According to ATTOM’s second-quarter vacant property and zombie foreclosure report, 1.3 million residential properties sit vacant. That represents 1.3 percent, or one in 76 homes, across the nation.
The report also found 259,166 residential properties are in the process of foreclosure in the second quarter, up 12.7 percent from the first quarter and up 15.9 year-over-year. Among those, 7,569 sit vacant, meaning that the number of zombie-foreclosure properties went up quarterly by 2.8 percent.
“The incidence of zombie-foreclosures tends to be higher in cases where the foreclosure process has dragged on for many months and sometimes even for years,” ATTOM Executive Vice President of Market Intelligence Rick Sharga said in a release. “We’re now seeing properties where the borrower was already in default prior to the government’s moratorium re-enter the foreclosure process, and undoubtedly some of these homes will have been vacated over the past 26 months.”
The number of zombie-foreclosures remains down 6.3 percent from a year ago and continues to represent just a tiny segment of the nation’s total stock of 99.7 million residential properties. But the recent increase in zombie properties is the first since the moratorium ended, ATTOM noted. The portion of all residential properties sitting empty in the foreclosure process has grown 1.9 percent quarter-over-quarter.
The upward foreclosure trends add to a list of measures showing how the decade-long housing market boom remains strong but also faces a possible slowdown this year, according to ATTOM. Median single-family home prices have shot up 17 percent over the past year and typical homeseller profits remain historically high, at nearly 50 percent. Homeowner equity continues rising, greatly limiting the likelihood that homeowners facing foreclosure will simply walk away from their homes.
“According to our equity report, almost 90 percent of homeowners in foreclosure have positive equity,” Sharga said. “Having equity gives financially-distressed homeowners an opportunity for a relatively soft landing – selling their home at a profit rather than losing everything to a foreclosure. That factor alone should keep the number of zombie-foreclosures from rising too much.”
The biggest increases from the first to second quarter in states with at least 50 zombie foreclosures were in Michigan, (zombie properties up 74 percent, from 54 to 94), Arizona (up 56 percent, from 32 to 50), Georgia (up 29 percent, from 62 to 80), Nevada (up 26 percent, from 68 to 86) and Iowa (up 17 percent, from 132 to 155).
The biggest quarterly decreases were in Massachusetts (down 13 percent, from 62 to 54), Missouri (down 13 percent, from 63 to 55), New Jersey (down 7 percent, from 275 to 257), New Mexico (down 3 percent, from 78 to 76) and New York (down 2 percent, from 2,074 to 2,041).
The vacancy rate for residential properties dropped to 1.31 percent in the second quarter, from 1.37 percent in the first quarter and from 1.42 percent in the second quarter of last year.
States with the biggest annual drops were Tennessee (down from 2.42 percent to 1.55 percent), Oregon (1.84 percent to 1.01 percent), Maryland (1.67 percent to 1.05 percent), Wisconsin (1.36 percent to.76 percent) and Minnesota (1.54 percent to .95 percent).
Among metro statistical areas that ATTOM studied, the highest zombie rates are in Peoria, Ill. (11.3 percent of properties in the foreclosure process are vacant); Wichita, Kan. (11.2 percent); Cleveland (9.5 percent); Syracuse, N.Y. (8.9 percent) and South Bend, Ind. (8.6 percent).
Among the 27.9 million investor-owned homes in the second quarter, about 905,000 were vacant, or 3.2 percent. The highest levels of vacant investor-owned homes were in Indiana (6.9 percent), Kansas (5.8 percent), Oklahoma (5.3 percent), Alabama (5.1 percent) and Ohio (5 percent).