ATTOM Data Solutions released its second-quarter 2021 Vacant Property and Zombie Foreclosure Report which analyzes publicly recorded data, including foreclosure status, equity, and owner-occupancy status, and matches it with monthly vacancy data. The number of properties processing foreclosure in the second quarter of 2021 is already up 27.5% from the first quarter with 223,671 in total. However, this is still down 13.3% from the second quarter of 2020. The report shows that about 1.4 million residential properties in the United States are vacant this quarter, representing 1.4% of all homes.
The number of empty pre-foreclosed zombie homes was up quarterly by 21% and 5.6% respectively. Yet, the portion of pre-foreclosed properties that have been abandoned dropped slightly from 3.8% in the first quarter to 3.6% in the second quarter.
The count of zombie foreclosures continues to rise despite the government-imposed moratorium on evictions. About 70% of home loans in the United States are government-backed mortgages protected by the moratorium, so lenders may not foreclose on them. Some private lenders have even offered moratorium extensions, due to the ongoing COVID-19 pandemic.
“The latest numbers show a spike in zombie properties during the second quarter that stands out compared to recent times, especially given the moratorium. It may simply be due to lenders foreclosing on homes that were already abandoned. We are watching that closely to see what it means and whether it’s the start of a new trend,” said Todd Teta, chief product officer with ATTOM Data Solutions.
Zombie foreclosures are up in 33 states, with some of the biggest increases coming from Maryland (up from 44 to 151), Iowa (up from 43 to 114), North Carolina (up from 68 to 119), South Carolina (up from 79 to 133) and Ohio (up from 633 to 1,033).
In the second quarter of 2021, New York continues to have the biggest number of zombie properties total (2,052), followed by Ohio (1,033), Florida (1,021), Illinois (897) and Pennsylvania (401).
Rick Sharga, executive vice president at RealtyTrac, an ATTOM Data Solutions company, said, “There are probably two things behind the increase in Zombie foreclosures: First, the fact that most foreclosure starts today are on vacant and abandoned properties; and second, there were also almost 250,000 loans in foreclosure prior to the pandemic, and they’ve been in limbo for over 14 months. Very likely that some of the borrowers in those properties have moved on, but lenders have been prohibited from beginning foreclosure proceedings on those loans.”
“But even with the increase, zombie foreclosures are still just a dot on the housing market radar screen, which is more testimony to how strong the housing market remains. You can still walk around most neighborhoods around the country and literally not find a single empty house going through the takeover process, and that remains very good news for current homeowners, as well as potential homeowners,” Teta added.
To see the full picture, view the report from ATTOM Data solutions.
