Florida Foreclosures Top the List of New Zombie Foreclosures

by on Foreclosure Rates

real estate florida homes

The bulk of the foreclosure crisis is now behind us, seven years after it started, and the number of foreclosure starts are down significantly across the country.

With that being said, a specter of the crisis – zombie foreclosures – is rearing its head once again.

Zombie foreclosures are homes that have started down the foreclosure pipeline but have not yet been repossessed, and have been vacated by their owners. The title still remains in the homeowner’s name, instead of being sold to another entity.

Zombie foreclosures are problematic because in addition to serving as downward forces on the values of surrounding homes – thus slowing the rate at which homeowners decide to sell their homes and upgrade – they can become eyesores, since they are no longer being tended for by occupants. The result is even more pressure on nearby home values, which only clogs the real estate engine that helps drive local economies.

Not to mention, zombie foreclosures aren’t actively in the system – they tend to linger for years without anything being done to move them along through the process. On average, zombie foreclosures existing today have been in the foreclosure pipeline for 1,031 days – almost three years.

Florida Foreclosures Top the Nation

When it comes to states that lead the list, Florida again comes in at number one – a dubious honor.

There were 141,000 total zombie foreclosures in the system across the nation in the second quarter of 2014. Over a third – 49,000 – were found in Florida. Within Florida, Tampa took the top spot, with 9,643 zombie foreclosures, good for the fourth-highest amount in metro areas in the U.S.

Zombie foreclosures aren’t problems just in Florida, though, which has the highest foreclosure rate in the country. Zombie foreclosure rates actually climbed in 10 states in the second quarter of 2014. These states included New York, New Jersey, Maryland, Alabama, Maine, Iowa, Delaware, Hawaii, Mississippi, and Wyoming.

New York and New Jersey are at the top of the list because they have the longest foreclosure processes in the country. The longer the process in a state, the more likely owners are to give up hope and abandon their properties, leaving their homes to the mercy of backlogged courts with full dockets. In New Jersey alone, the number of zombie foreclosures rose by 58 percent over the past year.