Zombie Foreclosures Are Still Very Much a Thing

Just in time for the Halloween holiday, ATTOM Data, released its fourth-quarter 2023 Vacant Property and Zombie Foreclosure Report which showed that zombie foreclosures are very much still a thing in today’s market with 1,294,505 properties sitting vacant amid a serious inventory crunch. 

That figure represents 1.27% of all housing units. To put that number another way, there is one vacant home for every 78 homes across the nation—a number that is virtually the same as the third quarter of 2023. 

The number of vacant properties that have transitioned into zombie properties (or vacant homes in pre-foreclosure) stands at 2.78%, or 8,903 units. Non-owner occupied investment properties were found to total 23,638,105 of which 842,497 were vacant. 

Finally, ATTOM found that the national number of bank-owned properties totaled 14,989 of which 15.85% were vacant (or 2,376 units). 

The report also reveals that 320,765 residential properties in the U.S. are in the process of foreclosure in the fourth quarter of this year, up 1.7% from the third quarter of 2023 and up 12.8% from the fourth quarter of 2022. A growing number of homeowners have faced possible foreclosure following the nationwide moratorium on lenders pursuing delinquent homeowners was imposed after the Coronavirus pandemic hit in early 2020 and was lifted in the middle of 2021. 

“The ongoing strength of the U.S. housing market continues to benefit neighborhoods around the country in so many ways, with the near-total lack of zombie foreclosures standing out as one striking example,” said Rob Barber, CEO for ATTOM. “Rising equity flowing from rising home values has not only kept foreclosure cases from spiking since the moratorium was lifted. It also keeps giving delinquent homeowners a valuable resource they can use to either stave off eviction or sell their homes and move on. As a result, we continue to see none of the widespread abandonment that followed the housing market crash after the Great Recession of the late 2000s.” 

The nationwide median home value grew 11%during the Spring-Summer buying season this year, hitting a new record of $350,000. Those gains followed an 8% decline from mid-2022 into early 2023. The growth in values has helped keep homeowner wealth at historic highs, with 95% of mortgaged owners having at least some equity built up and about 50% owing less than half the estimated value of their properties. 

Other high-level findings from the fourth quarter of 2023: 

• Among 166 metropolitan statistical areas in the U.S. with at least 100,000 residential properties in the fourth quarter of 2023, those with at least 100 properties facing possible foreclosure and the highest zombie foreclosure rates are Peoria, IL (12.4% of properties in the foreclosure process are vacant); Indianapolis, IN (9.9%); Cedar Rapids, IA (9%); Fort Wayne, IN (8.6%) and South Bend, IN (7.9%). 
• Aside from Indianapolis, the highest zombie-foreclosure rates in major metro areas with at least 500,000 residential properties and at least 100 homes facing foreclosure in the fourth quarter of 2023 are in Cleveland, Ohio (7.3% of homes in the foreclosure process are vacant); Baltimore, Maryland (6.7%); St. Louis, Missouri (6.1%) and Pittsburgh, Pennsylvania (6%). 
• Among the 23.6 million investor-owned homes throughout the U.S. in the fourth quarter of 2023, about 842,400 sit vacant, or 3.6%. The highest levels of vacant investor-owned homes are in Indiana (6.9% vacant), Illinois (6.1%), Oklahoma (6%), Alabama (6%) and Ohio (6%). 
• Among the roughly 15,000 foreclosed, bank-owned homes in the U.S. during the fourth quarter of 2023, 15.9% sit vacant. In states with at least 50 bank-owned homes, the largest vacancy rates are in Kansas (30.8% vacant), Michigan (25.9%), Ohio (24.5%), Missouri (23.8%) and Wyoming (22.6%). 
• The highest zombie-foreclosure rates in U.S. counties with at least 500 properties in the foreclosure process during the fourth quarter of 2023 are in Peoria County, Illinois (15.6% of homes in the foreclosure process are vacant); Baltimore City, Maryland (14%); Marion County (Indianapolis), Indiana (13.1%); Broome County (Binghamton), New York (11.4%) and Cuyahoga County (Cleveland), Ohio (8.2%). 
• Among zip codes with enough data to analyze, 82 of the top 100 where zombie properties represent the largest portions of all homes are in New York, Ohio and Illinois, including 10 in Cleveland, Ohio. The largest portions are in zip codes 10993 in Rockland County (West Haverstraw), New York (1-in-91 homes); 73554 in Greer County (Mangum), Oklahoma (1-is-222); 44108 in Cuyahoga County (Cleveland), Ohio (1-in-223); 61605 in Peoria County, Illinois (1-in-229) and 44112 in Cleveland, Ohio (1-in-236). 

Click here to see ATTOM’s report in its entirety.