One out of every 12,963 homes in the U.S. is a “zombie” property, according to a fourth-quarter 2022 report from Attom Data Solutions.
A zombie property (or zombie foreclosure) occurs when a homeowner receives a notice of default and, assuming they will lose the home via the upcoming foreclosure, abandons the property before it’s legally necessary for them to do so. But if for any reason, the foreclosure is never completed or canceled completely, the home will sit vacant and the title will remain under the homeowner’s name. In many cases, the homeowner may not even know they still technically own the home.
Attom Data’s most recent zombie property estimate puts the number of vacant pre-foreclosure homes at 7,722 nationwide. That’s up slightly from 7,707 in third-quarter 2022 and up from 7,432 in Q4 2021. Nonetheless, zombie foreclosures continue to be few and far between due to a market that up until recently had seen steam build up for nearly 11 years. With home values, equity and seller profits all skyrocketing, there has been many incentives for homeowners with past-due mortgages to do everything they can to keep from abandoning their properties.
Rick Sharga, executive vice president of market intelligence at Attom Data, noted that foreclosure activity is on the rise, which may give the number of zombie foreclosures across the U.S. a slight bump.
“The government’s foreclosure moratorium dramatically reduced the number of properties in foreclosure,” Sharga said. “Vacant and abandoned properties were among the few homes that could still be foreclosed on during the moratorium, so the number of zombie properties shrank as well. Now that the foreclosure ban has been lifted, we’re likely to see a gradual return to pre-pandemic levels.”
On a state-by-state basis, New York has the highest number of zombie foreclosures, with 1,995 properties vacated prior to foreclosure. Florida (1,030), Ohio (841), Illinois (780) and Pennsylvania (368) round out the top five states. Among metropolitan areas with at least 500,000 residential properties and at least 100 homes facing foreclosure in the fourth quarter, Cleveland has the highest zombie property rate at 7.1%, followed by Baltimore (6.1%); Pittsburgh (5.6%); Portland, Oregon (5.5%); and Indianapolis (5.4%).