More than 770,000 U.S. homes were in foreclosure at the close of the second quarter ended June 30, according to the latest data provided by RealtyTrac.
An estimated one in five of these, more than 150,000, have been abandoned but remain unclaimed. In the industry, these houses are referred to as zombie homes. In some states, the problem of zombie homes is particularly severe, including Indiana where roughly 30% of the 16,618 foreclosed homes have been abandoned.
In states such as Nevada, which had the highest unemployment rate in the country, residents are more likely to abandon their homes and look for work elsewhere. All of the states with the most zombie homes had unemployment rates higher than the national rate in July.
Many of the states experiencing heavy abandoned foreclosure problems have lower-than-average home prices, according to RealtyTrac Vice President Daren Blomquist. Indeed, as of July, home prices in most of these states were below the national median of $174,500. Vacant homes in foreclosure tend to be much older homes that are low value, theres not a lot of motivation for the owners to try to save those homes, he said.
The average U.S. foreclosure ending in the second quarter took 526 days to process. The average processing period was much higher in many of the states with the most zombie homes. In Florida, for example, the average foreclosure took 907 days to complete. Longer processing periods can be caused by state laws, including requirements for court proceedings and filing processing time. Homes may be held in limbo longer because the price is too low.
Foreclosure activity includes new case filings, scheduled auctions and repossessions.
