It seems a flourishing housing market is snuffing out one of its persistent horrors: The “zombie foreclosure.”
A “zombie foreclosure” — sometimes called a zombie title — occurs when homeowners incorrectly believe they must immediately move out after receiving a foreclosure notice, thus leaving the property in limbo. It not only compounds a serious issue for the homeowner but creates a scourge for an entire neighborhood that must live with the eyesore and its potential to devalue surrounding properties.
Fortunately for real estate investors, owner-abandoned properties amounted to only 3.38 percent — or a total of 10,291 — of all homes actively in the foreclosure process during the third quarter, according to ATTOM Data Solution’s 2018 Vacant Property and Zombie Foreclosure Report. That’s down from 4.18 percent a year ago during the same period.
“The number of vacant foreclosures is now less than one-fourth of the more than 44,000 in 2013 when we first began tracking these zombie homes,” said Daren Blomquist, senior vice president at ATTOM Data Solutions, a real estate data firm. “Policy solutions such as land banks designed to mitigate the ripple effects of vacant properties on neighborhoods and cities have had a substantial impact, and a booming housing market in many areas of the country is lifting all boats.”
Foreclosures, in general, are also down, according to ATTOM. Nearly 1.45 million U.S. single-family homes and condos were vacant at the end of the third quarter, which is 1.52 percent of all homes across the nation. That’s down from 1.58 percent during the same period in 2017.
There are still certain areas with higher concentrations of foreclosures, but they are diminishing in size and prevalence, Blomquist said. Tennessee leads the pack with 2.65 percent, followed by Kansas at 2.5 percent, Oklahoma at 2.49 percent, Mississippi at 2.47 percent and Indiana at 2.45 percent.
Among the more than 150 metros studied in the report, the areas with the highest share of vacant homes were in Flint, Michigan at 6.99 percent, Youngstown, Ohio at 3.80 percent and Beaumont-Port Arthur, Texas at 3.71 percent.
For the study, ATTOM analyzed county tax assessor data at the address level for more than 95 million single-family homes and condos for vacancy, broken down by foreclosure status and, owner-occupancy status.