Unbelievably, a number of homes are being held from a real estate market that is seeing constrained inventories. Approximately 3.8 million vacant homes need repairs or are bank-owned. These “zombie foreclosures” were abandoned by homeowners before the foreclosure process could be completed. During the second quarter of 2015, RealtyTrac showed over 127,000 of these properties existed. These houses accounted for double the total listings in the nation’s MLS registry.
Many of these homes are concentrated in particular areas of the country. Almost 40 percent of vacant homes are in 10 percent of census tracts. For instance, Cook County has 55,000 abandoned homes. This is one of the highest numbers in the United States.
Fortunately, economists claim improvements are being made. Many states have taken measures to fight the zombie foreclosures. The cities, including Chicago, Miami, and Cleveland, hit the hardest by this problem are now enjoying a decrease. On the other hand, banks are still pushing through long-deferred foreclosures that are raising the zombie foreclosure rates in stable markets like Boston, Los Angeles, and Houston. Places like Baltimore, Detroit, and Philadelphia are suffering as well.
Each city is treating the vacancies in a different manner. Cleveland is demolishing abandoned homes to preserve neighborhoods, and Buffalo, New York has started selling its vacant properties for $1.
Even though the real estate market seems to be in an upswing, a total recovery is impossible until these zombie foreclosures are gone. Concentrating on important cities like Baltimore, Detroit, Chicago, and Philadelphia is vital. These are the places that hold the key to America’s housing future.