This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

5 Housing Markets Overrun By Zombie Foreclosures

PORTLAND, Ore. (TheStreet) -- When there is no more room in housing market hell, zombie foreclosures will dot the earth.

According to real estate analysis firm RealtyTrac, one in every five homes in the foreclosure process (more than 152,000 in total) is sitting vacant. Abandoned by the distressed homeowner and not yet repossessed by the foreclosing lender, these homes have no one to maintain them, are falling into disrepair, attracting crime and dragging down the values of nearby homes.

As RealtyTrac Vice President Darren Bloomquist notes, zombie foreclosures sap tax dollars from county governments and hang over the head of former homeowners who in many cases don't even know they're still responsible for the property. Banks aren't helping, largely because they don't want to complete the foreclosure process and take on low-value homes that may never recuperate the loans in foreclosure. Missing homeowners aren't making it any easier, as fast-tracking zombie foreclosures is only possible when there's a homeowner to serve with proper foreclosure notices.

So, Walking Dead watchers, how do you handle a zombie? Well, just about no zombie narrative outside of South Park advises this method, but you can try to cure it. If a new homeowner is interested in buying the property and fixing it up, that rotting corpse of a home returns to its lucid state of lawn mowing, window fixing and other maintenance that improves the home and its value. Wooing that buyer with a short sale that lets the home go for less than the mortgage owed usually accomplishes this by giving the new owner some extra cash and equity to work with.

Must Read: Surprised By Your 2013 Tax Bill? You're Not Alone

That largely depends on the level of infestation., though As a study sponsored by Harvard University determined, the "gut" rehab performed on zombie foreclosures in Cleveland for decades is "not financially viable for most Cleveland neighborhoods." Instead, "demolition will likely remain the predominant means of blight removal and market stabilization." Yep, detaching the head and destroying the brain to save every living thing in the immediate vicinity.

With 17 million people in the U.S. planning to buy a home this year, that cure option is still on the table. But with the median home sale price already rising past $180,000 and interest rates rising, full rehab projects aren't quite the discount they were during the depths of the housing crisis.

We took a look at RealtyTrac's figures and found five metropolitan areas facing hordes of zombie foreclosures. While each of these locations would love to bring those properties back to life, a more bloody solution may be required:

1 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $124.53 0.00%
FB $85.80 0.00%
GOOG $521.52 0.00%
TSLA $262.02 0.00%
YHOO $38.91 0.00%

Markets

DOW 17,596.35 -350.33 -1.95%
S&P 500 2,057.64 -43.85 -2.09%
NASDAQ 4,958.4680 -122.0370 -2.40%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs