As the foreclosure process drags on in certain states, sometimes the homeowner will beat the lender and leave before a foreclosure sale date is set.
According to RealtyTrac’s estimate, 167,680 properties in foreclosure have been abandoned by their owner. The total represents 20 percent of all foreclosures.
Adding to this total are the more than 540,000 banked-owned properties still waiting to be sold to a third party.
“Somewhat ironically, efforts to slow the slide of the housing market in previous years are now hampering a smooth recovery by holding back inventory of homes that almost certainly must sell in the future but are not yet listed for sale,” explained Daren Blomquist, VP atRealtyTrac.
With 55,503 vacant foreclosures, Florida alone accounted for 33 percent of the national total.
Next in line was Illinois, which holds 17,672 abandoned foreclosures. California, Ohio, and New York each held around 9,000 vacant foreclosures.
Indiana surpassed other states with the highest share of foreclosures that are sitting empty, at 32 percent. In Oregon and Nevada, 28 percent of foreclosures are owner-vacated. Washington, Georgia, and Michigan followed closely behind, where the share for owner-vacated foreclosures was 27 percent for each state.
“Efforts to prevent unnecessary foreclosures and mitigate their impact on home values have resulted in a foreclosure process that takes an average of 477 days nationwide, and more than two years in some states – which is holding many of these must-sell properties off the market,” Blomquist said.
Among metro areas, Chicago led with 14,717 owner-vacated foreclosures, followed by Miami (13,901), New York (10,074), Tampa (9,998), and Orlando (5,569).
In this current low-inventory environment, the release of these vacant foreclosures should not cause prices to plummet, according to RealtyTrac.
“Even if all these homes flooded the market simultaneously they would likely not cause the once-feared double dip in prices given supply constraints from non-distressed sellers and stronger demand,” Blomquist said. “Given these market dynamics, it’s not surprising to see that Florida, Illinois and New Jersey – states with three of the four longest foreclosure timelines – have all had laws take effect in the last six months that speed up the foreclosure process on vacant properties. These laws should help provide some extra supply and possibly help reduce the threat of another housing price bubble forming in these markets.”
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