Vacant Zombie Property Rate In U.S. Holds Steady Amid Foreclosure Moratorium

ATTOM Data Solutions, curator of the nation’s premier property database and first property data provider of Data-as-a-Service (DaaS), has released its second-quarter 2020 Vacant Property and Zombie Foreclosure Report showing that 1.5 million (1,507,815) 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. (See full methodology enclosed below.) Vacancy data is available for U.S. residential properties at https://www.attomdata.com/solutions/marketing-lists/.

The analysis shows that about 258,000 homes are in the process of foreclosure, with about 7,650, or 3 percent, sitting empty as so-called ‘zombie foreclosures‘ in the second quarter of 2020. The percentage of zombie foreclosure properties is down slightly from 3.1 percent in the first quarter of 2020.

The total count of properties in the process of foreclosure (258,024) in the second quarter is down 8.8 percent from the first quarter of 2020 (282,767). 

The 7,652 zombie properties represent just one of every 13,000 homes in the nation’s stock of 99.2 million residential properties.

The second-quarter 2020 foreclosure and zombie property numbers have dropped since the first quarter amid a federal prohibition against lenders foreclosing on government-backed mortgages until at least June 30, 2020. The ban, which affects about 70 percent of home loans in the United States, was enacted under the CARES Act passed by Congress in March of this year and then extended this month to help borrowers affected by the national Coronavirus pandemic. 

“The foreclosure and zombie-property picture hasn’t changed much in the second quarter of this year as most lenders are barred from taking action against homeowners who are falling behind on their mortgages. We are in a holding pattern across the country as long as the moratorium continues,” said Todd Teta, chief product officer with ATTOM Data Solutions. “At some point, that will have to be lifted, so that banks can make their own decisions about whether to continue delaying foreclosures while the economy recovers. When that will happen is unknown, but that’s the point when we will see if foreclosure activity will remain at very low levels or rise.”

High-level findings from the report:

• A total of 7,652 residential properties facing possible foreclosure have been vacated by their owners nationwide in the second quarter of 2020. States where the percentage of zombie foreclosures are above the national average of 3 percent include Ohio (6.7 percent), New Mexico (5.5 percent), Indiana (4.8 percent), Illinois (4.7 percent) and Iowa (4.5 percent). The lowest rates – all less than 1.3 percent – are in South Dakota, Idaho, New Hampshire, Utah, New Jersey, Connecticut and Colorado.
• New York continues to have the highest actual number of zombie properties (2,158), followed by Florida (1,136), Ohio (877), Illinois (868) and New Jersey (302). 
• Among 158 metropolitan areas with at least 100,000 residential properties, Peoria, IL, continues to have the highest percentage of zombie foreclosures at 12.9 percent, followed by Cleveland, OH (11 percent); Syracuse, NY (8.9 percent); St. Louis, MO (7.8 percent) and Honolulu, HI (7.8 percent).
• Among major metro areas with at least 500,000 residential properties, the lowest zombie foreclosure rates are in San Francisco, CA (0.6 percent); Austin, TX (0.8 percent); Philadelphia, PA (1.1 percent); Phoenix, AZ (1.3 percent) and Boston, MA (1.4 percent).
• The top zombie foreclosure rates in counties with at least 500 properties in foreclosure include Cuyahoga County (Cleveland), OH (12.8 percent); Broome County (Binghamton), NY (10.1 percent); Saint Clair County, IL (outside of St. Louis, MO) (9.5 percent); Onondaga County (Syracuse), NY (9.3 percent) and Madison County, IL (outside of St. Louis, MO) (8.9 percent).
• Among zip codes with at least 100 properties in foreclosure, those where the zombie foreclosure rate exceeds 5 percent remain concentrated in New York, Florida, Ohio and Illinois. Those zip codes with the top percentages are 44108, 44112 and 44105, all in Cleveland, OH, 62002 in Alton, IL and 13601 in Watertown, NY.
• The highest levels of vacant investor-owned homes are in Indiana (8.4 percent), Kansas (6.6 percent), Ohio (6.3 percent), Minnesota (6.1 percent) and Mississippi (5.8 percent).
• The highest overall vacancy rates for all residential properties continue to be in Kansas (2.6 percent), Tennessee (2.6 percent), Mississippi (2.6 percent), Oklahoma (2.6 percent) and Indiana (2.5 percent). The lowest remain in New Hampshire (0.4 percent), Vermont (0.4 percent), Delaware (0.5 percent), Idaho (0.6 percent) and North Dakota (0.7 percent).