ATTOM’s first-quarter 2023 Vacant Property and Zombie Foreclosure Report shows that 1.3 million residential properties in the U.S. are currently vacant, including 8,141 zombie foreclosures (pre-foreclosure properties that have been abandoned by owners).
The rate of zombie foreclosures has risen 5.4% from Q4 2022 and is up 10.6% year over year. The count of zombie properties has grown in each of the last four quarters, ATTOM says.
Despite the ongoing increase, the number of zombie foreclosures remains historically low, with little impact on the nation’s total stock of 101.1 million residential properties. Just one of every 12,415 homes in the first quarter of 2023 is vacant and in foreclosure. That ratio is up from one in 12,963 in the fourth quarter of 2022 and from one in 13,424 in the first quarter of last year.
“The potential damage from zombie foreclosures and the decay they can cause remains far off the radar screen throughout much of the country,” says Rob Barber, CEO of ATTOM. “Although, there are few signs that indicate this could change over the coming months, as the numbers continue ticking upward, along with foreclosures in general. That’s something we will continue to keep an eye on, especially in economically distressed communities.”
The latest zombie foreclosure numbers – still a minimal presence throughout most of the country – continues one of the most enduring effects of the 11-year U.S. housing market boom that more than doubled the national median home value.
The runup stalled in the second half of last year as the median single-family home price dipped 8% nationwide. The number of foreclosures also has grown steadily since the moratorium was lifted.
But the decade of price gains boosted the typical selling profit margin up over 50% and raised homeowner equity to the point where almost half of all mortgaged homes across the country are worth at least twice what owners still owe on their loans. That, along with high employment and other factors, has left most homeowners in a strong enough position to resist foreclosure or at least sell their homes if they fall far enough behind on their mortgages to face a lender takeover.
The current situation stands in marked contrast to the years when the housing market collapsed following the Great Recession and a surge in homeowners abandoned their properties to foreclosure.
While zombie foreclosures remain a rarity in most neighborhoods around the U.S., the biggest increases from the fourth quarter of 2022 to the first quarter of 2023 in states with at least 50 zombie properties are in Iowa (zombie properties up 42 percent, from 160 to 227), Arizona (up 25 percent, from 40 to 50), Oklahoma (up 20 percent, from 118 to 142), Maryland (up 20 percent, from 150 to 180) and Massachusetts (up 17 percent, from 63 to 74).
The biggest quarterly decreases among states with at least 50 zombie foreclosures are in Maine (zombie properties down 10 percent, from 67 to 60), Nevada (down 10 percent, from 101 to 91), Georgia (down 6 percent, from 83 to 78), Connecticut (down 3 percent, from 75 to 73) and Michigan (down 3 percent, from 76 to 74).
Among metropolitan statistical areas in the U.S. with at least 100,000 residential properties and at least 100 properties facing possible foreclosure in the first quarter of 2023, the highest zombie foreclosure rates are in Wichita, Kan. (10.5 percent of properties in the foreclosure process are vacant); Peoria, Ill. (9.9 percent); Cedar Rapids, Iowa (8 percent); Flint, Mich. (7.7 percent) and Palm Bay-Melbourne, Fla. (7.4 percent).
The highest zombie-foreclosure rates in major metro areas with at least 500,000 residential properties and at least 100 homes facing foreclosure in the first quarter of 2023 are in Cleveland (6.1 percent of homes in the foreclosure process are vacant); Baltimore (6 percent); Pittsburgh (5.9 percent); Indianapolis (5.8 percent) and St. Louis (5.8 percent).
Photo by Simon Wijers on Unsplash
