The number of vacant “zombie” homes has recently declined from a previous spike, but could eventually continue to rise as foreclosure bans gradually expire, according to Attom Data Solutions.
The number of properties of this type before the foreclosure auction fell in Attom's third quarterly report from 8,078 in the previous period and 7,961 in the previous year to 7,538. With a few exceptions, the number of zombie traits has generally remained below 8,000 during the pandemic.
However, just before the pandemic, there were 9,000 or more vacant homes prior to the foreclosure sale. Finally, bad loans lagged behind by lifted bans could bring the number back to this level, if not higher, depending on how strong the property market continues, which would discourage borrowers from entering the foreclosure process.
The current near-term forecast suggests that residential construction will remain strong, Todd Teta, chief product officer at Attom, said in an email.
"Rising real estate values show no signs of a decline in the immediate future, despite many questions circulating in the real estate market that could drive prices down," he said.
Strong property valuations could help keep zombie properties relatively low and potentially cause them to decline further before they rise again, even in much of New York, the most concentrated state, and extending moratoriums said Teta. New York accounted for 2,053, or more than 27%, of all zombie real estate in the most recent quarter.
“With double-digit annual price increases in most parts of the country, large price increases mean more household wealth and potential resale profits. This gives homeowners a huge incentive to avoid foreclosure by keeping up with mortgage payments or to get out of foreclosure instead of just walking away and giving up real estate, "Teta said.