Zombie foreclosures – which occur when homeowners in foreclosure walk away from their properties before the bank officially takes possession, leaving the properties unoccupied and often in neglect for months and years – fell to new lows during the second quarter, according to RealtyTrac’s U.S. Residential Property Vacancy and Zombie Foreclosure Report.
As of the end of May, there were 19,187 U.S. residential properties actively in the foreclosure process and vacant (zombie foreclosures). That’s 4.7% of all residential properties in foreclosure – down 3.1% compared with the first quarter and down 30.1% compared with the second quarter of 2015.
States with the highest numbers of zombie foreclosures included New Jersey, New York, Florida, Illinois and Ohio.
In total, nearly 1.4 million properties representing 1.6% of all residential properties were vacant as of May, according to the report. That’s an increase of 2.7% compared with the first quarter.
Investment properties accounted for 75% of all vacant properties nationwide. The report includes dwellings in buildings with four units or fewer.
“Lenders have been taking advantage of the strong seller’s market to dispose of lingering foreclosure inventory over the past year – evidenced by 12 consecutive months of increasing bank repossessions ending in February and now evidenced by these numbers showing a sharp drop in vacant zombie foreclosures compared to a year ago,” says Daren Blomquist, senior vice president at RealtyTrac, in a statement. “As these zombie foreclosures hit the market for sale, they are providing a modicum of relief for the pressure cooker of escalating prices and deteriorating affordability that have defined the U.S. housing market in recent years.”
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