Zombie properties serve as a lingering reminder of a housing market still in the midst of self-correction. They serve as a legacy of the recent housing crisis, a byproduct of lengthy foreclosure timelines and mercurial state foreclosure statutes. RealtyTrac recently released a nationwide analysis of zombie properties, examining both states and institutions that have the most zombie properties.
The company considers a zombie property any property that has "started the foreclosure process but never been foreclosed and the homeowner has vacated the property."
RealtyTrac found that nationally, zombie properties totaled 141,406 in the second quarter of 2014, accounting for 21 percent of properties in foreclosure. All told, one in every five foreclosures has been vacated by the homeowner before the foreclosure has been completed.
Sequentially, zombie properties have been declining. Zombie properties are down 7 percent from roughly 152,000 in Q1 2014 and are down 16 percent from approximately 167,000 in Q2 2013.
However, not all states are seeing a drop in the number of zombie properties—24 states and the District of Columbia saw an increase from the previous quarter. States experiencing the largest gain in zombie properties from Q2 2013 include Mississippi (2,450 percent), The District of Columbia (300 percent), Wyoming (100 percent), New Jersey (58 percent), and Delaware (56 percent).
Florida accounted for more than one-third of all zombie foreclosures with 48,630. Rounding out the top five states were New York (12,666), New Jersey (12,170), Illinois (11,925), and Ohio (7,390).
Not surprisingly, states with some of the most zombie properties also had some of the longest average times that homes have been foreclosed: New York (418 days), Florida (411 days), New Jersey (378 days), Illinois (272 days), and Hawaii (249 days).
Financial institutions listed as the beneficiary on the foreclosure documents with the most zombie foreclosures were Wells Fargo (18,695), Bank of America (15,175), Chase (10,312), and US BankCorp (10,141).