Homes that are in foreclosure, but have not yet been taken back by a lender are called ‘zombie’ homes. According to the “Zombie Foreclosures and Vacant Property Report” by RealtyTrac, Q3 has seen a reduction of these vacant homes by 43% compared to one year ago and 27% compared to the quarter before. The number currently stands at 20,050 ‘zombie’ properties across the U.S., which is just 1.3% of the total 1.5 million vacant properties.
Foreclosures of all types, ‘zombie’ and otherwise, have fallen by 36 percent in the past year. Of all vacant properties in the United States, over 36% have at least one open loan. 6.2 percent of these homes are ‘seriously underwater,’ meaning the value of the loans secured are at least 25% greater than the market value of the home. One surprising development is that many of the owners of the foreclosed homes are not in financial distress. 63% or these homes are not under any lien at all. Despite the fact that the real estate industry has recovered from the recession substantially, some areas have been left behind. Many ‘zombie’ homes are likely in poor condition and/or located in areas that have yet to bounce back from the recession.
Recovery from the recession has not been enjoyed equally across the country. As a result, some regions have larger numbers of ‘zombie’ homes than others. States with the highest total number of ‘zombie’ homes are:
• New Jersey – 3,997 zombie homes
• Florida – 3,512 zombie homes
• New York – 3,365 zombie homes
• Illinois – 1,187 zombie homes
• Ohio – 1,028 zombie homes
In some states, the total number of zombie homes is lower than the states mentioned above, though a larger percentage of total vacant properties are zombie homes. Below are the percentages of all vacant properties that have yet to be taken back by a lender:
• New Jersey – 9.4%
• New York – 8.2%
• Nevada – 2.7%
• Massachusetts – 2.5%
• Illinois – 2.1%
Only two states in the nation have seen the number of zombie homes increase since the recession. In Massachusetts, the total number of zombie homes is up 66% when compared to eight years ago. In New Jersey, zombie homes have increased over 29% over the same time period.
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