Vacant foreclosure properties – dubbed ‘zombie foreclosures’ – are on the decline. According to the second quarter 2016 US Residential Property Vacancy and Zombie Foreclosure Report, there are just over 19,000 properties that are in the zombie foreclosure process, a drop of 3.1% from April and a 30.1% plummet from the same time last year. These properties represent 4.7% of all foreclosures.
As of May 2016, there were 15.9% zombie foreclosures in the country, a decline of 5% from the previous quarter.
Lenders aren’t exactly in the market to hang onto vacant foreclosed properties, and look for means to get them off the books as soon as possible. Luckily, the sizzling seller markets that many centers across the country have been experiencing are providing lenders with the perfect opportunity to unleash lingering foreclosure inventory.
This can be seen based on the increase in number of bank repossessions over 12 consecutive months ending in February, followed by the sharp decline in vacant foreclosures today compared to the same time last year.
As these vacant foreclosed properties continue to be listed for sale, they are offering some form of relief from skyrocketing prices and diminished affordability that have been plaguing the real estate market across the US over the recent past.
States with the highest rate of vacant foreclosures include:
- Oregon – 29.8 %
- Indiana – 29.7%
- Delaware – 28.3%
- Michigan – 27.0%
- Ohio – 25%
Metropolitan areas (those with a minimum of 100,000 residential properties) with the most vacant foreclosures include:
- Flint, Michigan – 7.2%
- Youngstown, Ohio – 4.7%
- Detroit, Michigan – 4.4%
- Beaumont-Port Arthur, Texas – 3.9%
- Mobile, Alabama – 3.7%
Metropolitan areas with the lowest vacancy rates include:
- San Jose, California – 0.2%
- Fort Collins, Colorado – 0.2%
- Manchester, New Hampshire – 0.3%
- Provo, Utah – 0.3%
- Lancaster, Pennsylvania – 0.3%
Areas with strong seller markets and healthy economies boast declining zombie foreclosures every month. Seattle, for instance, has been blessed with a hardy economy and real estate market, which has helped contribute to a steady decline in vacant foreclosures that lenders have been able to release onto the housing market.
In some way, these vacant foreclosures are helping to beef up the skimpy inventory levels in Seattle, and in other markets where inventory is tight.