Vacant Zombie Properties Remain Miniscule Factor in U.S. Housing Market Amid Ongoing Foreclosure Moratorium
ATTOM Data Solutions, curator of the nation’s premier property database, released its first-quarter 2021 Vacant Property and Zombie Foreclosure Report showing that 1.4 million (1,449,253) residential properties in the United States are vacant, representing 1.5 percent of all homes.
The report analyzes publicly recorded real estate data collected by ATTOM Data Solutions — including foreclosure status, equity, and owner-occupancy status — matched against monthly updated vacancy data. Vacancy data is available for U.S. residential properties at https://www.attomdata.com/solutions/marketing-lists/.
The report reveals that just 175,414 properties are in the process of foreclosure in the first quarter of this year, down 12.3 percent from the fourth quarter of 2020 and 38 percent from the first quarter of 2020. The number of pre-foreclosure homes sitting empty (6,677 in the first quarter of 2021) is also down 12.3 percent, measured quarterly, while it has decreased 23.1 percent, measured annually.
The portion of pre-foreclosure properties that have been abandoned into zombie status remained at 3.8 percent in the first quarter of 2021, compared to the prior quarter.
Among the nation’s total stock of nearly 99 million residential properties, zombie properties continue to represent just a miniscule portion – only one of every 14,825 homes in the first quarter of 2021. That figure is down from one in 13,074 in the fourth quarter of 2020 and one in 11,405 in the first quarter of last year.
The first-quarter 2021 data shows that empty homes at some point in the foreclosure process continue to disappear from most neighborhoods across the country as the housing market remains strong and the federal government keeps trying to shield homeowners from an economic slide stemming from the worldwide Coronavirus pandemic. A moratorium against lenders foreclosing on government-backed mortgages has been in place since last March, affecting about 70 percent of home loans in the United States. The temporary ban, recently extended to June 30, was enacted under the CARES Act passed by Congress last March to help borrowers who have lost jobs or other sources of income during the pandemic. Some private lenders also have voluntarily offered mortgage extensions.
“These days, you can walk through most neighborhoods in the United States and not spot a single zombie foreclosure. That continues a remarkable turnaround from the last recession when many communities were dotted by abandoned properties,” said Todd Teta, chief product officer with ATTOM Data Solutions. “The trend does remain on thin ice because foreclosures are temporarily on hold, and the market is still at risk of another wave of zombie properties when the moratorium is lifted, depending on the general state of the broader economy. For the moment, though, zombie properties remain pretty much a non-issue in the vast majority of the country.”
Zombie foreclosures down in 35 states
A total of 6,677 residential properties facing possible foreclosure have been vacated by their owners nationwide in the first quarter of 2021, down from 7,612 in the fourth quarter of 2020 and 8,678 in the first quarter of last year. The number dropped, quarter over quarter, in 35 states.
Among states with at least 100 properties in pre-foreclosure in the first quarter of 2021, the biggest decreases from last quarter in zombie properties included Kentucky (down 52 percent), Mississippi (down 51 percent), Louisiana (down 48 percent), Connecticut (down 47 percent) and California (down 44 percent). States with the biggest increases included Arkansas (up 63 percent), Texas (up 62 percent), Minnesota (up 32 percent), Massachusetts (up 24 percent) and Missouri (up 20 percent).
Zombie-foreclosure rates rise in 29 states
Zombie-foreclosure rates increased from the fourth quarter of 2020 to the first quarter of 2021 in 29 states. Those with at least 100 properties in the foreclosure process during the first quarter that have the largest increases include Kansas (rate up from 16.3 percent to 20.7 percent of all properties in the foreclosure process), Arkansas (up from 3.1 percent to 6.6 percent), Minnesota (up from 4.7 percent to 7.1 percent), Maine (up from 8.6 percent to 10.8 percent) and Hawaii (up from 4.7 percent to 6.4 percent).
Highest numbers of zombie properties again in northeastern and midwestern states
New York continues to have the highest number of zombie properties in the first quarter of 2021 (2,064), followed by Florida (926), Illinois (759), Ohio (633), and New Jersey (363). California leads in the West, with 130.
“It’s good to see the number of zombie foreclosures continue to fall,” said Rick Sharga, executive vice president at RealtyTrac, an ATTOM Data Solutions company. “But states with vacant properties caught in long judicial foreclosure processes should take steps to accelerate the disposition of those properties. This would reduce the health risks of having homes vacant during a pandemic, and provide much-needed affordable housing inventory to prospective homebuyers.”
States in Midwest and South show biggest decreases in overall vacancy rates
Vacancy rates for all residential properties in the U.S. declined to 1.46 percent in the first quarter of 2021, from 1.56 percent in the fourth quarter of 2020 and 1.53 percent in the first quarter of last year. States with the biggest decreases are Kentucky (down from 1.8 percent of all homes in the fourth quarter of 2021 to 1.2 percent now vacant), Rhode Island (down from 1.8 percent to 1.3 percent); Indiana (down from 2.5 percent to 2.3 percent), Kansas (down from 2.7 percent to 2.5 percent) and Mississippi (down from 2.7 percent to 2.5 percent).
Other high-level findings from first-quarter data:
- Among metropolitan statistical areas with at least 100,000 residential properties and at least 100 properties facing possible foreclosure, the highest zombie rates in the first quarter of 2021 are in Peoria, IL (15.5 percent of properties in the foreclosure process); South Bend, IN (15.2 percent); Cleveland, OH (12.3 percent); Davenport, IA (11.9 percent) and Baltimore, MD (11.9 percent).
- Aside from Cleveland and Baltimore, the highest zombie-foreclosure rates in major metro areas with at least 500,000 residential properties and at least 100 properties facing foreclosure are in St. Louis, MO (10.5 percent of foreclosure properties); Indianapolis, IN (9.2 percent) and Virginia Beach, VA (8.7 percent).
- The lowest zombie-foreclosure rates in metro areas with at least 500,000 properties in the first quarter of 2021, regardless of the number of homes in foreclosure, are in San Francisco, CA (0.7 percent of foreclosure properties); Denver, CO (1.5 percent); Charlotte, NC (1.6 percent); Los Angeles, CA (1.8 percent) and New York, NY (1.8 percent).
- The highest levels of vacant investor-owned homes in the first quarter of 2021 are in Indiana (7.5 percent), Kansas (6.5 percent), Mississippi (5.9 percent), Ohio (5.8 percent) and Michigan (5.8 percent).
- The highest overall vacancy rates for all residential properties in the first quarter of 2021 are in Oklahoma (2.5 percent), Tennessee (2.5 percent), Mississippi (2.5 percent), Kansas (2.5 percent) and Michigan (2.3 percent). The lowest are in New Hampshire (0.4 percent), Delaware (0.4 percent), Vermont (0.4 percent), Idaho (0.5 percent) and New Jersey (0.7 percent).
- The highest zombie-foreclosure rates among counties with at least 500 properties in foreclosure during the first quarter of 2021 are in Cuyahoga County (Cleveland), OH (13.8 percent); Broome County (Binghamton), NY (11.3 percent); Pinellas County (Clearwater), FL (10.6 percent); Onondaga County (Syracuse), NY (9.9 percent) and Allegheny County (Pittsburgh), PA (8.6 percent).
- The lowest rates among counties with at least 500 properties in foreclosure include Passaic County, NJ (west of New York City) (0.9 percent); Queens County, NY (1 percent); Westchester County, NY (outside New York City) (1 percent) and Osceola County (Kissimmee), FL (1 percent) and Kings County (Brooklyn), NY (1.1 percent).
