ATTOM released its first-quarter 2022 Vacant Property and Zombie Foreclosure Report showing 1.4 million residential properties throughout the U.S. are vacant. Although foreclosures continue to rise, overall vacancy rates have decreased in 38 states from Q1 of 2021 to Q1 of 2022.
The report analyzes publicly recorded real estate data collected by ATTOM, including foreclosure status, equity, and owner-occupancy status—matched against monthly updated vacancy data. Zombie foreclosures continue to represent a small portion of the nation's total stock of 98.8 million residential properties. One of every 13,424 homes in the first quarter of 2022 are currently vacant and in foreclosure.
The report revealed approximately 229,864 U.S. residential properties in Q1 of 2022 are in the process of foreclosure, up 3% from Q4 of 2021, and up 31% from the Q1 of 2021. The increase marked the second consecutive quarter that pre-foreclosure properties has gone up since a nationwide moratorium on lender takeovers of delinquent mortgages was lifted last July.
Among those pre-foreclosure properties, 7,363 remain vacant in Q1 of 2022, down quarterly by 0.9%, but up annually by 10.3%. The portion of pre-foreclosure properties that have been abandoned into zombie status dropped slightly from 3.3% in Q4 of 2021 to 3.2% in Q1 of this year.
"The problem of empty properties in foreclosure and the blight they can cause still remains off the table almost everywhere in the country. You'd need to search far and wide in most communities to find even one," said Todd Teta, CPO with ATTOM. "While it's unlikely that a tidal wave of zombie properties is headed our way as the economy improves, the number seems likely to head up to some degree this year. It will depend on how fast the courts process cases and how many delinquent homeowners can catch up on mortgages."
Zombie foreclosures are down quarterly, but up annually, as the total of 7,363 residential properties facing possible foreclosure have been vacated by their owners nationwide in Q1 of 2022. The number has decreased quarter-over-quarter in 25 states.
The highest number of zombie properties were found in:
- New York (2,074)
- Ohio (942)
- Florida (916)
- Illinois (676)
- Pennsylvania (356)
The biggest increases from Q1 of 2021 to Q1 of 2022 among states with at least 50 zombie foreclosures during Q1 were in:
- Connecticut (up 520%)
- Iowa (up 207%)
- Maryland (up 182%)
- Maine (up 174%)
- Nevada (up 119%)
The states with the biggest decreases in zombie foreclosures from Q4 of 2021 to Q1 of 2022 were:
- Michigan (-29%)
- New Jersey (-18%)
- Illinois (-11%)
- Oklahoma (-10%)
- North Carolina (-8%)
The Q1 zombie foreclosure trend remains among a host of measures showing how the decade-long surge in the U.S. housing market continues due to the ongoing Coronavirus pandemic that damaged the U.S. economy after hitting in 2020. Home prices in much of the country have soared more than 10% over the past year—with seller profits commonly exceeding 40%.
"Even with foreclosure activity rising, it doesn't seem likely that we'll see a significant increase in the number of zombie properties," said Rick Sharga, executive vice president of RealtyTrac, an ATTOM company. "Zombie status is most likely during a long, protracted foreclosure process, but with $23 trillion in homeowner equity, and demand outstripping supply, most distressed borrowers should be able to sell their home at a profit before the process drags on."
To read the full report, click here.