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.
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: