Foreclosures overall have dropped in the past year and the number of vacant “zombie” foreclosures is down 43 percent from a year ago, with the exception of a few markets, a new study from RealtyTrac.com shows. “The overall inventory of homes in the foreclosure process has dropped 36 percent over the past year, so it’s not too surprising to see a similarly dramatic drop in vacant zombie foreclosures,” Daren Blomquist, vice president at RealtyTrac.com, said in a news release. “What is surprising is there are so many vacant homes where the homeowners do not appear to be in financial distress — with only 3 percent in foreclosure or bank-owned, and only 6 percent that are underwater. More than 63 percent of these vacant homes are not even encumbered by a loan, owned free and clear by the owner. “The fact that the homeowners are not selling, given the recovering real estate market in most areas, indicates that many of these properties are in poor condition and in neighborhoods that have been left behind by the housing recovery,” Blomquist said. Vacant residential properties in the foreclosure process accounted for 1.3 percent of all vacant U.S. residential properties, with bank-owned homes (REO) accounting for another 1.9 percent of all vacant properties as of the end of the third quarter. The report shows a total of 1.5 million vacant U.S. residential properties, 1.8 percent of all 84.7 million U.S. residential properties. Among the 1.5 million vacant residential properties, 36.5 percent have at least one open loan and 6.2 percent are seriously underwater, meaning the combined value of loans secured by the property is at least 25 percent more than the estimated market value of the property. Markets with most vacant homes or ‘zombie foreclosures’ States with the most vacant “zombie” foreclosures were: • New Jersey (3,997) • Florida (3,512) • New York (3,365) • Illinois (1,187) • Ohio (1,028) Among metropolitan statistical areas with at least 100,000 total residential properties, those with the most vacant “zombie” foreclosures were: • New York (3,531) • Philadelphia (1,610) • Chicago (989) • Tampa (984) • Miami (866) “The zombie foreclosure crisis has for all practical purposes evaporated in South Florida. The vacant foreclosure numbers are a minimal 4.2 percent of foreclosures in the area,” Mike Pappas, CEO and president of the Keyes Company in South Florida, said in the release. “We have seen this number drop precipitously over the past few years. Due to our strong second-home and international buyer market, we do have a large number of properties that are not always occupied but are well maintained.” Among the 147 metro areas with at least 100,000 total residential properties, there were 21 that bucked the national trend and posted a year-over-year increase in vacant “zombie” foreclosures, including: • Boston (up 61 percent) • Worcester, Mass. (up 43 percent) • St. Louis (up 16 percent) • Philadelphia (up 15 percent) • Trenton, N.J. (up 11 percent) Markets with most total vacant properties States with the most total vacant residential properties were: • Florida (180,846) • Michigan (117,833) • Texas (117,350) • Ohio (86,416) • California (80,750) “Zombie foreclosures continue to limp along on their way to the final reckoning. Uncared for, these lifeless shells are a scary eyesore to any would-be seller, as they scare buyers interested in nice neighbors away,” Mark Hughes, chief operating officer with First Team Real Estate in Southern California, said in the release. “To start, the best idea for potential homesellers with a zombie foreclosure or vacant property nearby is to find out which bank has the note and lean on them to clean up, secure and make these homes safe. It may be worth it for sellers to send a lawn crew over to spruce up the yard at times to help with curb appeal.” The good news in Seattle is that “builders or flippers are buying up many of those that are still around, so it could only be a matter of time before that vacant home is making a positive contribution to the neighborhood,” OB Jacobi, president of Windermere Real Estate, said in the release. “Buyers have so few choices for homes right now that they will often overlook the eyesore next door.” States with most vacant properties underwater States with the most vacant properties seriously underwater were: • Florida (16,723) • Ohio (9,237) • Illinois (7,397) • New Jersey (6,306) • California (5,187) Among metropolitan statistical areas with at least 100,000 total residential properties, those with the most vacant residential properties seriously underwater were: • Chicago (6,638) • Miami (5,546) • New York (3,952) • Detroit (3,739) • Cleveland (3,488)
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