We Get Support From:
Become a Supporter 
 We Get Support From:
Become a Supporter 

Higher Housing Demand Means Fewer Zombie Foreclosures

  

Fewer neighborhoods have vacant homes in limbo, or properties not yet repossessed by a bank. Sometimes referred to as "zombies," these foreclosures are notorious for dragging down property values and just generally being sore thumbs on the block.

"The numbers of these zombie foreclosures are dwindling dramatically in most parts of the country, that includes California,” says Daren Blomquist, senior vice president at ATTOM Data Solutions.

Blomquist says between July and September, there were 345 zombie foreclosures in California.

"And that was down from 452 a year ago, as of the end of the third-quarter, so it's down 24 percent," says Blomquist.

"This decrease is a function of a very hot housing market across California where even the most distressed properties, these properties will need a lot of work, but people are willing to buy these properties very quickly often and I think that's why we're seeing this dramatic 24 percent decrease."

The peak for zombies in California was the third-quarter of 2013 when there were 1,800 of them.

In the Sacramento area, there were only 35 zombie foreclosures in the third-quarter of 2017, down from 47 a year ago, a 26 percent decrease.

Meanwhile, more California homes are being converted into rentals, and a growing number of them are empty.

"A 5 percent increase in Sacramento in those vacant investment properties, or rental properties, from a year ago. In California it was actually a 9 percent increase," says Blomquist.

He attributes the increase to a shifting housing market that's becoming more rental and less homeownership...and rentals have a much higher turnover.

"Part of the result of that shift is you do have a slightly higher property vacant rate. It's something to keep an eye on. Vacant properties in general, they don't have to be in foreclosure, are not typically great for a neighborhood."

Sign up for ReCap

and never miss the top stories

Delivered to your inbox every Wednesday.

Check out a sample ReCap newsletter.