IRVINE, CA—RealtyTrac says the incidence of vacated, or so-called “zombie foreclosures” dropped 10% in the second quarter compared to a year ago.
“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,” said Daren Blomquist, vice president at RealtyTrac. “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.
“The average estimated market value of an owner-vacated foreclosure is 22% 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.”
Homeowner-vacated zombie foreclosures nationwide down 10% from a year ago
- 127,021 owner-vacated zombie foreclosures as of the end of the second quarter, down 11% from previous quarter and down 10% 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
Zombies 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%), Los Angeles (up 39%), Houston (38%), Philadelphia (up 19%), and Boston (up 14%).
- Major markets where the number of zombies decreased from a year ago included Chicago (down 28%), Dallas (down 27%), Miami (down 46%), Atlanta (down 33%), and Phoenix (down 14%).
- Data is also available at the county and zip code level.
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 from ReatyTrac at the county and zip code level.
Zombie 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% (or 22% 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% of the average square footage of owner-occupied foreclosures (1873). Data at state and metro level available.
- Six 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.
California sits near the middle, in terms of total numbers (rank 19), but is among a handful of states that has seen a big increase (+60%) in incidents since the same quarter a year ago.
“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,” said Mark Hughes, chief operating officer with First Team Real Estate, covering the Southern California market. “As such the owners have moved on and left these Zombie foreclosures to deteriorate and limp along until a new owner brings new blood.”
| Rate Rank | State Name | Q2 2015 Total Owner-Vacated Foreclosures | Pct of Total Foreclosures | Pct Change from Q1 2015 | Pct Change from Q2 2014 |
| U.S. | 127,021 | 24% | -11% | -10% | |
| 29 | 699 | 28% | -18% | -44% | |
| 43 | 30 | 15% | -45% | -39% | |
| 25 | 1,228 | 28% | 14% | -12% | |
| 42 | 167 | 35% | 40% | 406% | |
| 19 | 6,808 | 17% | -8% | 60% | |
| 27 | 909 | 23% | 7% | -13% | |
| 41 | 216 | 22% | -36% | -35% | |
| 11 | 377 | 32% | -22% | -29% | |
| 2 | 27,808 | 26% | -23% | -43% | |
| 20 | 1,896 | 29% | -6% | -30% | |
| 30 | 162 | 13% | -29% | -43% | |
| 24 | 288 | 27% | -25% | -31% | |
| 6 | 7,958 | 21% | -15% | -33% | |
| 5 | 4,880 | 33% | -6% | 24% | |
| 22 | 591 | 34% | -16% | -28% | |
| 26 | 507 | 42% | 22% | 64% | |
| 35 | 464 | 38% | -9% | 6% | |
| 33 | 487 | 24% | -6% | -28% | |
| 21 | 333 | 37% | -47% | -68% | |
| 8 | 2,862 | 29% | -15% | -3% | |
| 15 | 2,012 | 25% | 15% | 24% | |
| 31 | 1,184 | 26% | 5% | -7% | |
| 38 | 422 | 23% | -21% | -33% | |
| 44 | 103 | 26% | 8% | 102% | |
| 40 | 408 | 30% | 5% | -11% | |
| 39 | 125 | 29% | -9% | 468% | |
| 4 | 2,379 | 34% | 5% | 23% | |
| 36 | 136 | 27% | -7% | -22% | |
| 1 | 16,977 | 24% | -6% | 39% | |
| 10 | 918 | 30% | 2% | -7% | |
| 3 | 17,043 | 19% | 2% | 35% | |
| 18 | 2,642 | 25% | 77%* | ||
| 9 | 5,932 | 30% | -19% | -20% | |
| 12 | 1,496 | 32% | 63% | 127% | |
| 14 | 1,301 | 46% | -4% | 24% | |
| 13 | 4,479 | 23% | -9% | -6% | |
| 34 | 112 | 26% | -39% | -28% | |
| 7 | 2,755 | 25% | -9% | -23% | |
| 28 | 1,046 | 24% | 40% | 597%* | |
| 37 | 1,879 | 20% | -19% | 1% | |
| 23 | 431 | 19% | -26% | -34% | |
| 32 | 856 | 23% | 13% | 92% | |
| 16 | 1,986 | 31% | 1% | 0% | |
| 17 | 1,668 | 24% | -34% | -18% |
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David Phillips
David Phillips is a Chicago-based freelance writer and consultant with more than 20 years experience in business and community news. He also has extensive reporting experience in the food manufacturing industry for national trade publications.
