Zombie Foreclosures Increase 21 Percent Across Nation in Second Quarter of 2021
But Zombie Foreclosures Still Represent Just One of Every 12,300 Residential Properties; Percentage of Foreclosure Properties Sitting Empty Ticks Down
ATTOM Data Solutions, curator of the nation’s premier property database, released its second-quarter 2021 Vacant Property and Zombie Foreclosure Report showing that 1.4 million (1,409,457) residential properties in the United States are vacant this quarter, representing 1.4 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. (See full methodology enclosed below). Vacancy data is available for U.S. residential properties at https://www.attomdata.com/solutions/marketing-lists/.
The report reveals that 223,671 properties are in the process of foreclosure in the second quarter of this year, up 27.5 percent from the first quarter of 2021 but still down 13.3 percent from the second quarter of 2020. The number of pre-foreclosure homes or Zombie homes sitting empty (8,078 in the second quarter of 2021) was up both quarterly, by 21 percent, and annually, by 5.6 percent.
The portion of pre-foreclosure properties that have been abandoned into zombie status dropped slightly, from 3.8 percent in the first quarter of 2021 to 3.6 percent in the second quarter of 2021.
Among the nation’s total stock of 99 million residential properties, the portion represented by zombie properties remains miniscule, but has grown slightly in the second quarter of 2021. One of every 12,256 homes in the second quarter sit empty in the foreclosure process, up from one in 14,825 in the first quarter of 2021 and up from one in 12,967 in the second quarter of last year.
The count of zombie foreclosures has risen this quarter despite an ongoing federally-imposed moratorium on foreclosures aimed at helping homeowners get through economic troubles stemming from the worldwide Coronavirus pandemic. Affecting about 70 percent of home loans in the United States, the moratorium bars lenders from pursuing delinquent homeowners who have government-backed mortgages. It has been in place since last March and is currently in effect until the end of June. Some private lenders also have voluntarily offered mortgage extensions.
“The latest numbers show a spike in zombie properties during the second quarter that stands out compared to recent times, especially given the moratorium. It may simply be due to lenders foreclosing on homes that were already abandoned. We are watching that closely to see what it means and whether it’s the start of new trend,” said Todd Teta, chief product officer with ATTOM Data Solutions. “But even with the increase, zombie foreclosures are still just a dot on the housing market radar screen, which is more testimony to how strong the housing market remains. You can still walk around most neighborhoods around the country and literally not find a single empty house going through the takeover process, and that remains very good news for current homeowners, as well as potential homeowners.”
Zombie foreclosures up in 33 states
A total of 8,078 residential properties facing possible foreclosure have been vacated by their owners nationwide in the second quarter of 2021, up from 6,677 in the first quarter of 2021 and from 7,652 in the second quarter of last year. The number increased, quarter over quarter, in 33 states and the District of Columbia.
Among states with at least 100 zombie foreclosures during the second quarter of 2021, some the biggest increases from the first quarter to the second quarter of this year include Maryland (up from 44 to 151), Iowa (up from 43 to 114), North Carolina (up from 68 to 119), South Carolina (up from 79 to 133) and Ohio (up from 633 to 1,033).
“We’ve seen this before – government officials who are trying to prevent unnecessary defaults delay foreclosure proceedings for so long that the distressed borrowers simply abandon the property before the foreclosure takes place,” said Rick Sharga, executive vice president at RealtyTrac, an ATTOM Data Solutions company. “There are probably two things behind the increase in Zombie foreclosures: First, the fact that most foreclosure starts today are on vacant and abandoned properties; and second, there were also almost 250,000 loans in foreclosure prior to the pandemic, and they’ve been in limbo for over 14 months. Very likely that some of the borrowers in those properties have moved on, but lenders have been prohibited from beginning foreclosure proceedings on those loans.”
Highest numbers of zombie properties again in northeastern and midwestern states
New York continues to have the highest number of zombie properties in the second quarter of 2021 (2,052), followed by Ohio (1,033), Florida (1,021), Illinois (897) and Pennsylvania (401).
States in Midwest and South show biggest decreases in overall vacancy rates
Vacancy rates for all residential properties in the U.S. declined slightly to 1.42 percent in the second quarter of 2021, from 1.46 percent in the first quarter of 2021 and 1.52 percent in the second quarter of last year.
States with the biggest quarterly decreases in overall vacancy rates are Rhode Island (down from 1.3 percent of all homes in the first quarter of 2021 to 1 percent in the second quarter), Mississippi (down from 2.5 percent to 2.2 percent), Kentucky (down from 1.2 percent to 1.1 percent), South Carolina (down from 1.7 percent to 1.6 percent) and Kansas (down from 2.5 percent to 2.4 percent).
Other high-level findings from the second-quarter data:
- Among 159 metropolitan statistical areas with at least 100,000 residential properties and at least 100 properties facing possible foreclosure, the highest zombie rates in the second quarter of 2021 are in Peoria, IL (14.2 percent of properties in the foreclosure process are vacant); Wichita, KS (14.1 percent); South Bend, IN (12 percent); Youngstown, OH (11.6 percent) and Cleveland, OH (11.5 percent).
- Aside from Cleveland, the highest zombie-foreclosure rates in major metro areas with at least 500,000 residential properties and at least 100 properties facing foreclosure in the second quarter of 2021 are in Detroit, MI (10.4 percent of properties in the foreclosure process are vacant); Atlanta, GA (9.7 percent); Portland, OR (9.6 percent) and Houston, TX (7.8 percent).
- The lowest zombie-foreclosure rates in metro areas with at least 500,000 properties in the second quarter of 2021, regardless of the number of homes in foreclosure, are in San Francisco, CA (0.8 percent of foreclosure properties); Charlotte, NC (1.3 percent); Denver, CO (1.4 percent); San Diego, CA (1.4 percent) and Sacramento, CA (1.5 percent).
- States with the highest levels of vacant investor-owned homes in the second quarter of 2021 are in Indiana (7.3 percent), Kansas (6.3 percent), Minnesota (5.8 percent), Ohio (5.7 percent) and Tennessee (5.6 percent).
- States with the highest overall vacancy rates in the second quarter of 2021 are Oklahoma (2.5 percent), Tennessee (2.4 percent), Kansas (2.4 percent), Indiana (2.2 percent) and Michigan (2.2 percent). The lowest rates are in Delaware (0.3 percent), New Hampshire (0.4 percent), Vermont (0.4 percent), Idaho (0.5 percent) and New Jersey (0.7 percent).
- The highest zombie-foreclosure rates among 421 counties with at least 50,000 residential properties and 500 properties in foreclosure during the second quarter of 2021 are in Cuyahoga County (Cleveland), OH (13 percent); Broome County (Binghamton), NY (12.3 percent); Baltimore City/County, MD (12.3 percent); Pinellas County (Clearwater), FL (11.3 percent) and Onondaga County (Syracuse), NY (10.1 percent).
- The lowest zombie rates among counties with at least 500 properties in foreclosure in the second quarter of 2021 include Mecklenburg County (Charlotte), NC (0.7 percent); Bergen County, NJ (outside New York City) (0.7 percent); Queens County, NY (0.9 percent); Mercer County (Trenton), NJ (0.9 percent) and Osceola County (Kissimmee), FL (1 percent).
Report Methodology
ATTOM Data Solutions analyzed county tax assessor data for 99 million single-family houses and condos for vacancy, broken down by foreclosure status and, owner-occupancy status. Only metropolitan statistical areas with at least 100,000 residential properties and counties with at least 50,000 residential properties were included in the analysis. Vacancy data is available at https://www.attomdata.com/solutions/marketing-lists/.
About ATTOM Data Solutions
ATTOM Data Solutions provides premium property data to power products that improve transparency, innovation, efficiency and disruption in a data-driven economy. ATTOM multi-sources property tax, deed, mortgage, foreclosure, environmental risk, natural hazard, and neighborhood data for more than 155 million U.S. residential and commercial properties covering 99 percent of the nation’s population. A rigorous data management process involving more than 20 steps validates, standardizes and enhances the data collected by ATTOM, assigning each property record with a persistent, unique ID — the ATTOM ID. The 20TB ATTOM Data Warehouse fuels innovation in many industries including mortgage, real estate, insurance, marketing, government and more through flexible data delivery solutions that include bulk file licenses, property data APIs, real estate market trends, marketing lists, match & append and introducing the first property data delivery solution, a cloud-based data platform that streamlines data management – Data-as-a-Service (DaaS).
