Zombie Attack

The total number of so-called zombie foreclosures represented 127,021, or 24 percent, of the 527,047 U.S. properties in active foreclosure in the second quarter of 2015, according to a recent study by RealtyTrac. Zombie foreclosures are homes where the foreclosure process has begun, but the homeowner has vacated the property. These empty homes, which are often in need of repairs and are sometimes inhabited by squatters or drug dealers, drive down home values in the local market.

In Q2, 1 out of every 1,040 housing units in foreclosure was an owner-vacated foreclosure. This figure is down 11 percent from Q1 2015 and down 10 percent from a year ago.

Although public policy measures have helped combat this type of foreclosure in markets such as Chicago, Miami and Cleveland, the study says, high rates are still found in the New Jersey, Tampa and New York markets. In addition, 91 out of the 183 metropolitan areas studied in this report logged an increase in zombie foreclosures compared to a year ago.

The average market value of an owner-vacated foreclosure in Q2 was $195,856, 22 percent below the average market value of owner-occupied foreclosures ($251,236). The average square footage of an owner-vacated foreclosure in Q2 was 1,718, 92 percent of the average square footage of owner-occupied foreclosures (1,873).

The low average estimated market value of an owner-vacated foreclosure demonstrates “how these zombies are contributing to blight in neighborhoods across the country,” says Daren Blomquist, vice president at RealtyTrac.