Residential Real Estate News
Zombie Home Foreclosures Continue to Grow in the U.S.
Vacant Homes in Foreclosure Increases for Fifth Straight Quarter
Based on ATTOM's newly released second-quarter 2023 Vacant Property and Zombie Foreclosure Report, almost 1.3 million (1,285,633) residential properties in the United States are vacant. That figure represents 1.3 percent, or one in 79 homes, across the nation.
The report also reveals that 311,508 residential properties in the U.S. are in the process of foreclosure in the second quarter of this year, up 4.3 percent from the first quarter of 2023 and up 20.2 percent from the second quarter of 2022. A growing number of homeowners have faced possible foreclosure since a nationwide moratorium on lenders pursuing delinquent homeowners, imposed after the Coronavirus pandemic hit in early 2020, was lifted in the middle of 2021.
Among those pre-foreclosure properties, 8,752 sit vacant as zombie foreclosures (pre-foreclosure properties abandoned by owners) in the second quarter of 2023. That figure is up 7.5 percent from the prior quarter and up 15.6 percent from a year ago. The count of zombie properties has grown in each of the last five quarters, dating back to early in 2022.
Still, the number of zombie foreclosures remains historically low, with little impact on the nation's total stock of 101.3 million residential properties.
"Zombie foreclosures keep inching up as lenders pursue more delinquent homeowners in courts around the country. All indications are that the number of zombie properties will keep going up slowly, given that foreclosures are up," said Rob Barber, chief executive officer for ATTOM. "But abandoned properties are still nothing more than a dot on the radar screen among the majority of neighborhoods. We are still a long way from the fallout after the Great Recession of the late 2000s, when this was a very real issue in many areas around the U.S."
The lack of zombie foreclosures throughout most of the country continues to stand out as one of the most significant effects of the U.S. housing market boom that more than doubled the national median home value from 2012 to 2022.
Zombie foreclosures rise again but still pose no issues in most neighborhoods
A total of 8,752 residential properties facing possible foreclosure have been vacated by their owners nationwide in the second quarter of 2023, up from 8,141 in the first quarter of 2023 and from 7,569 in the second quarter of 2022. The number of zombie properties has grown quarterly in 29 states and annually in 36.
While most neighborhoods around the U.S. have little or no zombie foreclosures, the biggest increases from the first quarter of 2023 to the second quarter of 2023 in states with at least 50 zombie properties are in Texas (zombie properties up 47 percent, from 114 to 168), Ohio (up 26 percent, from 846 to 1,070), Oklahoma (up 22 percent, from 142 to 173), Georgia (up 22 percent, from 78 to 95) and Iowa (up 21 percent, from 227 to 274).
The only quarterly decreases among states with at least 50 zombie foreclosures are in Michigan (zombie properties down 20 percent, from 74 to 59), South Carolina (down 2 percent, from 154 to 151), Pennsylvania (down 1 percent, from 404 to 401) and New York (down less than 1 percent, from 2,006 to 2,000).
New York continues to have the highest ratio of zombie homes to all residential properties (one of every 2,140 homes), followed by Ohio (one in 3,615), Iowa (one in 4,480), Illinois (one in 4,687) and Florida (one in 5,926).
Overall vacancy rates unchanged
The vacancy rate for residential properties in the U.S. has remained the same in the second quarter of 2023 after dropping in the prior three quarters. It now stands at 1.27 percent (one in 79 properties), the same as in the first quarter of 2023, but still down from 1.31 percent in the second quarter of last year (one in 76).
States with the biggest annual drops in the overall vacancy rate are Tennessee (down from 1.55 percent of all homes in the second quarter of 2022 to 1.02 percent in the second quarter of this year), Michigan (down from 2.14 percent to 1.88 percent), Georgia (down from 1.61 percent to 1.39 percent), Minnesota (down from 0.95 percent to 0.73 percent) and New Jersey (down from 0.53 percent to 0.36 percent).
Other high-level findings from the second quarter of 2023:
- Among 166 metropolitan statistical areas in the U.S. with at least 100,000 residential properties and at least 100 properties facing possible foreclosure in the second quarter of 2023, the highest zombie foreclosure rates are in Wichita, KS (13.1 percent of properties in the foreclosure process are vacant); Cedar Rapids, IA (11.3 percent); Peoria, IL (9.7 percent); Toledo, OH (8.8 percent) and Youngstown, OH (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 second quarter of 2023 are in Cleveland, OH (7.1 percent of homes in the foreclosure process are vacant); Indianapolis, IN (6.5 percent); St. Louis, MO (5.8 percent); Baltimore, MD (5.7 percent) and Pittsburgh, PA (5.4 percent).
- Among the 23.6 million investor-owned homes throughout the U.S. in the second quarter of 2023, about 843,000 are vacant, or 3.6 percent. The highest levels of vacant investor-owned homes are in Indiana (6.9 percent vacant), Alabama (6.1 percent), Oklahoma (6 percent), Ohio (5.9 percent) and Illinois (5.8 percent).
- Among the roughly 14,900 foreclosed, bank-owned homes in the U.S. during the second quarter of 2023, 14.5 percent are vacant. In states with at least 50 bank-owned homes, the largest vacancy rates are in Iowa (27.8 percent vacant), Ohio (24.8 percent), New Mexico (22.9 percent), Indiana (22.8 percent) and New York (20.8 percent).
- The highest zombie-foreclosure rates in U.S. counties with at least 500 properties in the foreclosure process during the second quarter of 2023 are in Peoria County, IL (11.7 percent zombie foreclosures); Broome County (Binghamton), NY (11.6 percent); Baltimore County, MD (11.2 percent); Lake County, IL (outside Chicago) (9.9 percent) and Marion County (Indianapolis), IN (8.5 percent).
- Among zip codes with at least 1,000 residential properties, 44 of the 50 with the largest portions of overall homes in zombie status are in New York, Ohio and Illinois, as well as seven in Cleveland, OH. The biggest ratios are in zip codes 10993 in Rockland County (West Haverstraw), NY (one in 191 homes); 44112 in Cleveland, OH (one in 213); 13754 in Broome County (Deposit), NY (one in 239); 44108 in Cleveland, OH (one in 255) and 73554 in Greer County (Mangum), OK (one in 259).
