‘Zombie’ Foreclosures Haunt Housing Market

A new study finds that 301,874 “zombie” homes—properties where home owners receive foreclosure notices and move out, leaving the home vacant and deteriorating—exist in the U.S.

The state with the highest number of “zombie” properties is Florida, with 90,556 vacant homes in foreclosure, according to data by RealtyTrac, in their first analysis of “zombie” properties. Illinois ranks second with 31,668 “zombie” properties and California ranks third with 28,821.

However, Kentucky leads overall in percentage of zombie properties; abandoned homes represent 54 percent of Kentucky’s total foreclosure inventory. Abandoned foreclosures also represent 50 percent or more of the properties in foreclosure in Washington, Indiana, Nevada, and Oregon, according to RealtyTrac.

In January, Reuters reported a problem with “zombie” titles—home owners who received a foreclosure notice and walked away from their home but did not realize their names remained on the deed and they were still financially liable for the property. In some cases, the banks never ultimately pursued the foreclosure, but the home owners were unaware of that since they already had moved out.

RealtyTrac counted any property that had been in foreclosure longer than the state average and that showed no significant recent activity on it as a “zombie” property in its report.

“I think the empty foreclosures is less of a long-term threat but it certainly is affecting individual communities and neighborhoods,” says Daren Blomquist, RealtyTrac’s vice president.

Source: “More than 300,000 homes are foreclosed ‘zombies,’ study says,” Reuters (March 28, 2013)