Twenty percent of foreclosures nationwide sit empty after an owner vacated the premises, representing 167,000 distressed properties across the country, RealtyTrac announced Thursday.
While it’s imperative these properties move quickly through the default process to cushion surrounding real estate values, in many states, it’s just not happening, says Daren Blomquist, vice president of RealtyTrac, a research firm that published the report.
Instead, laws designed to keep the housing market afloat and to prevent a flood of distressed assets make it more difficult to move assets that could benefit from full-time ownership.
RealtyTrac points out that states with long foreclosure timelines – namely Florida and New York – contain higher numbers of vacant foreclosures, with Florida counting 55,503 vacant foreclosures and New York dealing with 9,173.
Illinois also ranks high with 17,672 vacant foreclosures and then there’s Ohio with 9,723 foreclosures sitting empty.
If the distressed inventory were to hit the market all at once, it would have little impact on home prices, RealtyTrac claims. In fact, at this point, the research firm believes moving vacant real estate would benefit markets still suffering years after the housing meltdown.
“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,” added Blomquist.
In addition, the nation has 544,274 bank-owned properties that have yet to be sold to a third party even though they have already made it through the foreclosure process.
As for what foreclosures are sitting vacant?
Twenty-nine percent are valued below $50,000 and 25% fall somewhere in the $50,000-to-$100,000 range. Another 12% of vacant foreclosures are in the $1 million-plus range.
States where the percentage of owner-vacated foreclosures hovers well above the national average of 20% include Indiana (32%); Oregon (28%); Nevada (28%); Washington (27%); and Georgia (27%).
Bank of America (BAC), GMAC, Chase, Wells Fargo and Citi are the servicers with the most vacant distressed inventory in their portfolios.