Chicago holds a majority of zombie foreclosures, vacant homes
Despite a 43 percent national drop of “zombie” foreclosures, they still remain a problem in several parts of the country, according to a RealtyTrac study.
The study, which was looking at “zombie” foreclosures – residential properties in the foreclosure process but not yet repossessed by the foreclosing lender – found that Illinois has the fourth-highest number of “zombie” foreclosures in the U.S., with 1,187 by the end of Q3 2015. Chicago made up 989 of those foreclosures, the third highest in the nation for an area with at least 100,000 total residential properties.
Vacant Underwater Properties Still a Problem in Chicago
The study also looked at the states and cities with the highest numbers of seriously underwater properties, or properties with loans totaling above 25 percent of the market value of the house. In Illinois, 7,397 vacant homes were seriously underwater, and Chicago accounted for 6,638 of those, the highest amount of underwater vacant homes in an area of at least 100,000 total residential properties.
Daren Blomquist, vice president of RealtyTrac, noted that the nationwide drop in “zombie” foreclosures was not that surprising, thanks to the overall inventory of homes in the foreclosure process dropping by 36 percent as well.
“What is surprising is there are so many vacant homes where the homeowners do not appear to be in financial distress —with only 3 percent in foreclosure or bank owned, and only 6 percent that are underwater,” Blomquist said. “More than 63 percent of these vacant homes are not even encumbered by a loan, owned free and clear by the owner. The fact that the homeowners are not selling given the recovering real estate market in most areas indicates that many of these properties are in poor condition and in neighborhoods that have been left behind by the housing recovery.”
Only six states defied the national drop in zombie foreclosures. The states with the most notable increases were Massachusetts, up 66 percent, and New Jersey, up 29 percent.
The report views homes in which homeowners are not picking up the mail as being vacant based on the US Postal Service’s monthly address-level data matched against RealtyTrac’s public property record database. This does not apply if the homeowner is forwarding the mail to another address.