IRVINE, Calif. (3/14/14)--An improvement in foreclosure numbers unseen in seven years was reported this week by RealtyTrac in its U.S. Foreclosure Market Report for February.
Filings for foreclosures--default notices, scheduled auctions or bank repossessions--last month dropped by 10%, or down to 112,498. The recent decline also reflects a 27% decrease from levels in February of last year (RealtyTrac March 13).
But despite the positive numbers, a new trend in foreclosures appears to be creeping up as of late.
"Zombie" foreclosures--or uncared-for, owner-vacated properties--have started to grip the housing market, as 21% of all foreclosures, or about 152,000, fall into this category.
On average, zombie foreclosures dwell in the foreclosure process for 1,031 days, or almost 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 homeowner or the foreclosing lender taking responsibility for maintenance and upkeep of the home," said Daren Blomquist, RealtyTrac vice president.
"These properties drag down home values in the surrounding neighborhood and contribute to a climate of uncertainty and low inventory in local housing markets," Blomquist added.
Blomquist also has written that before lending institutions repossess these properties, houses are left to deteriorate, attracting vandalism and other crime to the area.
While several solutions to the zombie foreclosure problem exist that could lead to the retention of these homes, studies show the most viable way to cure housing markets replete with "the undead" is demolition.
Cleveland, for example, a rust-belt city like many others grappling with a spate of zombie foreclosures, has demolished more than 1,000 homes so far (CNN.com March 13).
However, if a new homeowner is interested in buying the vacated home and rehabbing and revitalizing it, Blomquist said, the new owner can improve the value of the property, which can spill over to other parts of the surrounding neighborhood.