Vacant Zombie Homes in Foreclosure Down 9 Percent Annually in U.S.
Yet Bank-Owned Vacancies Up 67 Percent Annually
According to RealtyTrac's latest U.S. Residential Property Vacancy and Zombie Foreclosure Report
for the third quarter of 2016, nearly 1.4 million (1,361,188) U.S. residential properties (1 to 4 units) representing 1.6 percent of all residential properties were vacant as of the end of the third quarter. The number of vacant properties decreased 3 percent from the previous quarter and was down 9 percent from a year ago.
The report shows that as of the end of the third quarter, 18,304 U.S. residential properties actively in the foreclosure process were vacant (zombie foreclosures), representing 4.7 percent of all residential properties in foreclosure. The number of zombie foreclosures decreased 5 percent from the previous quarter and decreased 9 percent from Q3 2015.
Meanwhile there were 46,604 vacant bank-owned (REO) residential properties as of the end of the third quarter, an increase of 7 percent from the previous quarter and up 67 percent from Q3 2015.
"A strong seller's market along with political pressure has likely motivated lenders to complete the foreclosure process over the past year on many vacant properties that were lingering in foreclosure limbo for years," said Daren Blomquist, senior vice president of RealtyTrac's new parent company ATTOM Data Solutions. "While that has reduced the number of vacant properties in the foreclosure process -- so-called zombie foreclosures -- it has also resulted in a corresponding rise in the number of vacant bank-owned homes. Assuming that the foreclosing lenders are maintaining these properties and paying the property taxes, they pose less of a threat to neighborhood quality than zombie foreclosures, but they still represent latent inventory in an inventory-starved housing market."Markets with the most vacant REOs
States with the most vacant REO properties as of the end of the third quarter were Florida (5,880), Michigan (4,661), Ohio (3,585), Illinois (2,652), and Georgia (2,626).
Among 148 metropolitan statistical areas with at least 100,000 residential properties analyzed for the report, those with the most vacant REOs were Detroit (2,386), Chicago (2,379), Miami (1,880), Philadelphia (1,737) and New York (1,668).
Other metro areas in the top 10 for most vacant REOs were Baltimore (1,649), Atlanta (1,573), Tampa (1,310), Cleveland (1,106) and Flint, Michigan (1,091).Markets with the most zombie foreclosures
States with the most vacant foreclosures (zombies) were New Jersey (3,698), New York (3,556), Florida (2,528), Illinois (1,018) and Ohio (999).
"With increasing jobs across Ohio, and low market available inventory, strong demand continues to drive vacancies to reduced levels across Ohio," said Michael Mahon, president at HER Realtors, covering the Cincinnati, Dayton and Columbus markets in Ohio, where zombie foreclosures decreased 3 percent from a year ago and overall vacancies were down 7 percent. "Reduced vacancies continue to provide the fuel for what appears to be a continued seller's market through the fall."
Metro areas with the highest number of vacant foreclosures (zombies) were New York (3,590), Philadelphia (1,525), Chicago (783), Miami (694), and Tampa (603).Top 10 Most Vacant U.S. CitiesTop 10 U.S. Cities Running out of Rooms
"Because of the Seattle area's rapidly rising apartment rents, single-family rentals have become a viable option, resulting in a drop in the number of vacant investment properties as these units become occupied," said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle market, where the number of vacant homes in Q3 2016 decreased 18 percent from a year ago and accounted for just 0.8 percent of all residential properties. "Going forward, I expect single-family rentals to remain relatively buoyant; however, demand for this market could start to dampen as 'boomerang buyers' who formerly lost their homes to foreclosure begin buying again." Investment properties account for 76 percent of all vacant homes
A total of 1.1 million (1,035,813) U.S. residential investment properties were vacant as of the end of Q3 2016, 76.1 percent of all vacant properties nationwide and representing 4.3 percent of all investment properties.
States with highest investment property vacancy rate were Michigan (10.3 percent), Indiana (9.8 percent), Alabama (6.9 percent), Mississippi (6.6 percent), and Kansas (6.5 percent).
Metro areas with the highest investment property vacancy rate were Flint, Michigan (24.3 percent), Detroit (12.6 percent), Youngstown, Ohio (12.1 percent), South Bend, Indiana (11.5 percent), and Indianapolis (11.0 percent).