Despite Q3 Decline, Zombie Foreclosure Problem Lingers In Many Areas

While zombie foreclosures in the U.S. declined overall in the third quarter, they continue to be a problem in some areas, according to RealtyTrac's Q3 2014 Zombie Foreclosure Report released earlier this week.

RealtyTrac reported that the number of zombie foreclosures, which are vacated homes for which the foreclosure process has begun but has not been completed, increased year-over-year in 60 out of 212 (28 percent) metropolitan areas with a population of more than 200,000 and in 16 states (32 percent) in Q3, going against the overall national trend of decline.

The five states with the largest year-over-year increase in owner-vacated foreclosures in Q3 were New Jersey (75 percent), North Carolina (65 pecent), Oklahoma (37 percent), New York (30 percent), and Alabama (29 percent), according to RealtyTrac. The five metro areas with the largest increase in zombie foreclosures from Q3 2013 to Q3 2014 were Trenton, New Jersey (106 percent), Rochester, New York (49 percent), Washington, D.C. (40 percent), New York (38 percent), and Philadelphia (21 percent).

Florida had the most zombie foreclosures of any state by far with 35,913, accounting for 31 percent of all zombie foreclosures in the nation, according to RealtyTrac. The second highest total of zombie foreclosures was in New York, with 12,683. New Jersey was a close third with 12,133, followed by Illinois (8,678) and Ohio (4,981). These five states accounted for 63 percent of the 117,298 zombie foreclosures in the U.S. in Q3.

While Florida had the highest number of zombie foreclosures in any state, the New York metro area (which includes Northern New Jersey and part of Pennsylvania) had the highest total of any metro with 13,366 in Q3, accounting for 12 percent of all the owner-vacated foreclosures during the quarter. Miami was second with 9,869, followed by Tampa (7,509), Chicago (7,326), and Philadelphia (5,405), according to RealtyTrac.

Zombie foreclosures made up 18 percent of all foreclosures in the U.S. in Q3, and RealtyTrac reported that 33 states, or 66 percent, had a higher zombie foreclosure rate than the national average of 18 percent during the quarter. The top states were Oregon (36 percent), Nevada (32 percent), Kansas (31 percent), and Maine (28 percent).

RealtyTrac reported that 117 out of 212 metro areas with a population of more than 200,000 had a higher zombie foreclosure rate than the 18 percent nation average. The leading metro areas were Las Vegas (33 percent), Tampa (28 percent), Palm-Bay-Melbourne-Titusville, Florida (28 percent), Rochester, New York (27 percent), land Lakeland, Florida (27 percent).