Real-Estate

Zombie foreclosures spike in 2Q, could be start of new upward trend

While government-mandated foreclosure mortoria remain in place, the number of vacant homes entering the foreclosure process has spiked, according to a report from Attom Data Solutions.

These properties, commonly referred to as “zombie foreclosures” totaled 8,078 in the second quarter of 2021, jumping 21% from 6,677 quarterly and 5.6% from 7,652 annually, according to Attom Data Solutions. They represent one in every 12,256 U.S. residential properties, a shrunken ratio from 14,825 in the first quarter and 12,967 year-over-year.

About 250,000 mortgages sat in the foreclosure process ahead of the pandemic and it’s likely those homeowners left their properties and sparked the increase, according to Rick Sharga, executive vice president of Attom’s consumer-facing business, RealtyTrac.

“We’ve seen this before — government officials who are trying to prevent unnecessary defaults delay foreclosure proceedings for so long that the distressed borrowers simply abandon the property before the foreclosure takes place,” Sharga said in the report.

For the second quarter in a row, the majority of states saw rising shares of zombie foreclosures. Numbers increased in 33 states and Washington D.C. from the first quarter, led by jumps to 1,033 from 633 in Ohio, 151 from 44 in Maryland, and 114 from 43 in Iowa. New York kept its top spot in total zombie properties at 2,052, accounting for as many as the next two states: Ohio’s 1,033 and Florida’s 1,021.

Oklahoma had the highest vacancy rate at 2.5%, followed by 2.4% in both Tennessee and Kansas, and 2.2% in both Indiana and Michigan. Delaware had the lowest at 0.3%, narrowly ahead of New Hampshire and Vermont’s 0.4% rates and Idaho’s 0.5%. Indiana had the highest share of investor-owned zombie homes at 7.3%, followed by 6.3% in Kansas and 5.8% in Minnesota.

Peoria, Ill., continues to pace all metro areas with populations of at least 100,000 with a zombie rate of 14.2%. Wichita, Kan., came next at 14.1%, South Bend, Ind., at 12%, Youngstown, Ohio at 11.6% and Cleveland at 11.5%.

As CARES Act protections kept overall foreclosures down 13.3% from year-ago rates, they spiked 27.5% from the first quarter to a total of 223,671 units.

“It may simply be due to lenders foreclosing on homes that were already abandoned,” said Attom’s chief product officer Todd Teta. “We are watching that closely to see what it means and whether it’s the start of a new trend.”

Of the approximate 99 million homes in the U.S., 1.4 million sit empty, totaling a 1.4% share of single-family homes and condos.


Most Related Links :
Business News Governmental News Finance News

Need Your Help Today. Your $1 can change life.

[charitable_donation_form campaign_id=57167]

Source link

Back to top button