Vampire, zombie properties on rise nationwide
Posted on Monday, October 7, 2013 at 11:26:04 AM
Monsters aren't just for movies and television shows. The housing market can also see its fair share, such as vampire REOs and zombie foreclosures which are possibly slowing down the overall recovery.
While these monsters are less theatrical, they still pose a threat to residential financing and real estate. Vampire REOs are bank-owned properties where the previous owner still lives, and zombie foreclosures are unoccupied homes that are slowly moving through the process, according to RealtyTrac.
A recent report by the real estate analytics firm found that roughly 47 percent of the 525,000 homes in the U.S. are considered vampire REOs.
Daren Blomquist, vice president of RealtyTrac, told the Financial Times that the distressed inventory had been held back artificially, which raised home values and helped the housing recovery. He added that when these properties go up for sale, it could take some steam out of the housing sector.
In addition, markets with a high rate of vampire REOs include Miami, Houston and Los Angeles. Las Vegas has more than 8,000 foreclosures, and 29 percent of those have been abandoned, RealtyTrac reported.
One possible reason why foreclosures are stuck in the system is because of new residential financing laws, according to the Financial Times. California, Massachusetts and Nevada all protect borrowers from improper foreclosure, which also means banks have a harder time selling quickly.