New data reported from ATTOM, in its Vacant Property and Zombie Foreclosure Report, found the number of zombie foreclosures – pre-foreclosure properties that have been abandoned by their owner – has been on the rise since the end of pandemic-era moratoria on evictions and foreclosures.
The report for the first quarter of 2023 found 298,533 residential properties in the U.S. are in the process of foreclosure, up 5 percent from the fourth quarter 2022 report and up nearly 30 percent from first quarter 2022.
Among the pre-foreclosure properties in the first quarter report, 8,141 are zombie foreclosures. This is an increase of 5.4 percent from the previous quarter and up 10.6 percent from a year earlier.
The count of zombie properties has grown in each of the last four quarters, ATTOM said. Despite the ongoing increase, the number of zombie-foreclosures remains historically low, with little impact on the nation's total stock of 101.1 million residential properties.
“The potential damage from zombie foreclosures and the decay they can cause remains far off the radar screen throughout much of the country,” ATTOM CEO Rob Barber said. “Although, there are few signs that indicate this could change over the coming months, as the numbers continue ticking upward, along with foreclosures in general. That’s something we will continue to keep an eye on, especially in economically distressed communities.”
A total of 8,141 residential properties facing possible foreclosure have been vacated by their owners nationwide in the first quarter of 2023, up slightly from 7,722 in the fourth quarter of 2022 and from 7,363 in the first quarter of 2022.
While zombie foreclosures remain a rarity in most neighborhoods, the biggest increases from the fourth quarter to the first quarter in states with at least 50 zombie properties are in Iowa (zombie properties up 42 percent), Arizona (up 25 percent), Oklahoma (up 20 percent), Maryland (up 20 percent) and Massachusetts (up 17 percent).
The biggest quarterly decreases among states with at least 50 zombie foreclosures are in Maine (down 10 percent), Nevada (down 10 percent), Georgia (down 6 percent), Connecticut (down 3 percent) and Michigan (down 3 percent).