Share of zombie foreclosures grows in first quarter
While the overall foreclosure rate fell, the share of zombie properties grew in the first quarter of 2020, according to Attom Data Solutions.
Of the approximately 282,800 properties in the foreclosure process, 8,678 — or 3.1% — are vacant, according to Attom's Vacant Property and Zombie Foreclosure Report. That percentage of zombie properties rose from 3% in the fourth quarter of 2019, but is much lower than the 5.8% from 2014's opening quarter.
In the fourth quarter, 288,300 properties were in the foreclosure process. Since 2016, properties facing foreclosure dropped 27% while possible zombie foreclosures fell 53% as the housing market continues its recovery from the crisis.
"Homes abandoned by owners facing a possible foreclosure remain little more than a blip on the radar across the country, as one of the main scourges of the Great Recession continues to show little or no signs of re-emerging," Todd Teta, chief product officer with Attom Data Solutions, said in a press release.
"Even with the slight increase in these so-called zombie foreclosures, so far this year, there are still pockets of distress with elevated numbers of abandoned homes. But in yet another reflection of how the national housing market is still booming, you can drive through many towns and not pass a single such property."
New York continues to have the most zombie properties at 2,206. Florida came next with 1,390, then 977 in Ohio and 943 in Illinois. By zombie share of total foreclosures, Ohio leads at 6.8%, followed by 5.1% in Indiana, 4.7% in Illinois and 4.5% in Oklahoma.
About 1.5% of all homes sit vacant in the United States, totaling over 1.52 million single-family homes and condos.
In a separate study from Auction.com, two-thirds of industry experts expect the inflow of foreclosures and REOs to increase in 2020 even if the overall market remains healthy.
"Most in the default servicing industry expect government-insured loans to be the primary source of increased foreclosure inflow in 2020, even in the absence of a widespread recession or housing downturn," said Jesse Roth, senior vice president of strategic partnerships and business development with Auction.com. "That’s a rational conclusion given the rising risk profile of FHA-backed loans originated in the last five years."