A new report shows that in the second quarter of this year there were that 127,021 homes actively in the foreclosure process had been vacated by the homeowners prior to a completed foreclosure, called zombie foreclosures, representing 24 percent of all active foreclosures, according to RealtyTrac.

These owner-vacated foreclosure properties will likely end up as short sales, foreclosure auction sales or bank-owned sales in the future, according to the report.

The total number of zombie foreclosures was down 11 percent from previous quarter and down 10 percent from Q2 2014. Zombie foreclosures represented 24 percent of the 527,047 U.S. properties in foreclosure. One in every 1,040 U.S. housing units was an owner-vacated zombie foreclosure.

Zombie foreclosures down overall but still up in half of the metro areas surveyed says Daren Blomquist of RealtyTrac

Daren Blomquist

“A growing number of states and cities have enacted public policy measures to combat the problem of zombie foreclosures, and we are seeing the results of those efforts in the overall decrease nationwide as well as in several hard-hit markets such as Chicago, Miami and Cleveland,” Daren Blomquist, vice president at RealtyTrac, said in the release.

“Still, as banks push through long-deferred foreclosures that are more likely to be owner-vacated this year, we are seeing a somewhat surprising increase in zombie foreclosures in markets with overall low foreclosure rates such as Los Angeles, Houston and Boston,” he said in the release.

“The average estimated market value of an owner-vacated foreclosure is 22 percent below the average estimated market value of an owner-occupied foreclosure, indicating that it is in a foreclosing bank’s best interest to have a home occupied during the foreclosure process and also demonstrating how these zombies are contributing to blight in neighborhoods across the country,” Blomquist said.

Zombie foreclosures down overall but up in half of U.S. metro areas

Homeowner-vacated zombie foreclosures nationwide down 10 percent from a year ago

  • 127,021 owner-vacated zombie foreclosures as of the end of the second quarter, down 11 percent from previous quarter and down 10 percent from Q2 2014
  •  Zombie foreclosures represented about one in five of the 527,047 U.S. properties in foreclosure
  •  One in every 1,040 U.S. housing units is a owner-vacated zombie foreclosure

Zombie foreclosures still up from year ago in half of U.S. metros

  • Zombies still increased in 91 of the 183 metropolitan statistical areas analyzed in the report
  • Major markets where the number of zombies increased from a year ago included New York (up 38 percent), Los Angeles (up 39 percent), Houston (38 percent), Philadelphia (up 19 percent), and Boston (up 14 percent).
  •  Major markets where the number of zombies decreased from a year ago included Chicago (down 28 percent), Dallas (down 27 percent), Miami (down 46 percent), Atlanta (down 33 percent), and Phoenix (down 14 percent).

Zombie foreclosure trends in top metro markets

Highest rates of zombie foreclosures in New Jersey, Florida and New York markets

  • Nationwide one in every 1,040 total housing units was a zombie foreclosure.
  • The highest zombie foreclosure rates among the 183 metro areas analyzed in the report were in Atlantic City, New Jersey (one in 130 housing units), Trenton, New Jersey (one in 166 housing units), Tampa, Florida (one in 218 housing units), Binghamton, New York (one in every 260 housing units), and Ocala, Florida (one in every 262 housing units).
  • Among the states the highest zombie foreclosure rates were in New Jersey (one in every 210 housing units), Florida (one in every 324 housing units), New York (one in every 476 housing units), Nevada (one in every 495 housing units), and Indiana (one in every 574 housing units).
  • Data is also available at the county and zip code level.

Zombie foreclosure values lower, square footage smaller and have more deceased homeowners

  •  The average market value of an owner-vacated zombie foreclosure in the second quarter was $195,856, 78 percent (or 22 percent below) the average market value of owner-occupied foreclosures ($251,236). Data at state and metro level available.
  • The average square footage of an owner-vacated zombie foreclosure in the second quarter was 1718, 92 percent of the average square footage of owner-occupied foreclosures (1873). Data at state and metro level available.
  •  6 percent of all owner-vacated zombie foreclosures involved a homeowner who is deceased, compared to 3 percent of all owner-occupied foreclosures with a deceased homeowner.

The take in Seattle

“I suspect that the reason we’re seeing slightly more zombie foreclosures in Seattle is because our market is appreciating; therefore, banks are hanging onto these properties longer in order to recoup more of the funds they are owed,”  OB Jacobi, president of Windermere Real Estate,  in Seattle said in the release.

In South Florida

“In South Florida, we continue to see a dramatic improvement in the foreclosure arena. Zombie foreclosures have dropped 46 percent year-over-year. The wheels of our judicial process turn slowly, but the good news is we are in the last rounds of this fight,” Mike Pappas, CEO and president of the Keyes Company, said in the release. “Occupied homes always outperform vacated properties. It behooves the banks to work with the homeowners to maximize the property value for all.”

In Ohio

“As Ohio homeowners continue to experience increased appreciation of home values, and decreasing days on market for available inventory, foreclosures numbers continue to decrease across the state. For those homeowners facing economic troubles caused by job loss, divorce, or untimely death of a family member; an important aspect to remember is communicating with a Realtor early in the process rather than vacating the home,”  Michael Mahon, president at HER Realtors, said in the release.

In Southern California

“We are at the end of a long workout cycle and the distress inventory being processed by banks here are an aggregation of tough foreclosure transactions that have typically evolved with starts and stops to the process but in reality the outcome for these REO’s has been known for a while,” Mark Hughes, chief operating officer with First Team Real Estate, said in the release. “As such the owners have moved on and left these zombie foreclosures to deteriorate and limp along until a new owner brings new blood.”

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