Zombie foreclosures still weighing on housing markets

Foreclosures have hit their lowest level in years, yet many cities report they are still struggling with the blight of “zombie foreclosures.”

RealtyTrac reported Thursday that foreclosure filings fell 27% year-over-year in February to a new seven-year low, indicating that the pace of filings have returned to normal levels since the foreclosure crisis. However, lingering problems loom.

Vacated by the owner and left unattended, nearly 152,000 “zombie foreclosures” are weighing on home values in states like Florida, Illinois and New York, RealtyTrac said. That’s roughly 21% of all homes in the foreclosure process.

On average, these homes have been going through the foreclosure process for 1,031 days — or nearly three years.

“The biggest threat from foreclosures going forward is properties that have been lingering in the foreclosure process for years, many of them vacant with neither the distressed homeowners nor the foreclosing lenders staking responsibility for maintenance and upkeep of the homes,” said Daren Blomquist, RealtyTrac’s spokesman.

In some cities, every one in three foreclosed homes has been vacated, according to Blomquist.

“That drags down home values in the surrounding neighborhood and contributes to a climate of uncertainty in local housing markets,” he said.

In Rust-Belt cities like Cleveland and Detroit, many of the zombie foreclosures are old homes in poor condition that would cost more to rehab than they would be worth and will likely be razed. Cleveland has already knocked down more than 1,000 vacant homes.

Las Vegas and other Sun-Belt cities also have a high percentage of vacant foreclosed homes. However, these homes tend to be newer and in much better shape and more likely to be bought by real estate investors, said Blomquist.

Overall, the foreclosure picture will likely continue to improve: Foreclosure starts — when lenders begin the proceedings to take possession of the homes — have fallen to their lowest level since late 2005.

That should translate into fewer bank repossessions down the road since about half of all starts end in evictions of borrowers.

Florida, where one of every 372 properties was hit with a filing in February, had the highest filing rate of any state. Other hard hit states included Maryland, Nevada, New Jersey and Illinois.

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About thenoelteam

As a Broker with RE/MAX Alliance, I work energetically for my clients whether they are a buyer or seller. I help you achieve your goal of owning a home or getting the best price for your home in the shortest time possible. After graduating from UCLA with a degree in communications and finance, I was licensed in 1977 and since then I have sold over 3600 properties amounting to over $1 billion in sales. I currently rank in the top 10 in home sales for Colorado. I offer the same quality of service and superior communication to all clients, ranging from starter homes to multi-million dollar estates, commercial and income properties, relocations and foreclosures My goal is to provide you with the best representation possible whether you are buying or selling. Over the years, one of the things that I've discovered is that there is a difference in the way individual Realtors do business. For me, I have always felt that honesty and personal integrity are the foundations upon which a successful business and career are built and sustained. I have an extensive background and knowledge base in real estate, including financing, which has enabled me to provide outstanding, quality advice and service not found with many agents today. My commitment to communication creates a positive relationship between my client and myself that results in a successful property sale or purchase. My passion for real estate, commitment to my clients and personal integrity has helped me to achieve success placing me in the top 1% of all brokers in nationwide. In my career, I have earned a number of awards and received considerable recognition for my success but the most significant recognition comes from the fact that over 75% of my business comes from past clients. My success is a true measure of my client satisfaction.
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