While there are a variety of options for homeowners in foreclosure,many have chosen to cut their losses and abandon their property. The housing market has been improving across much of the nation. However, some cities still have a long recovery process ahead of them as the market deals with a glut of homes in foreclosure, which can often stay in the system for several years. Meanwhile, many of these remain vacant.
In Wichita, Kansas, nearly half of homes in foreclosure were abandoned as of the first quarter of 2014. In six of the nation’s most populous metro areas, at least a third of homes in foreclosure were vacant. Based on data provided by housing data website RealtyTrac for the nation’s 100 largest metro areas, these are the cities where residents are abandoning their homes.
Median housing prices in all but one of the metro areas with the most vacant homes were among the lowest in the country. In addition, housing prices fell during the last 12 months in four of the 10 cities: Boise, St. Louis, Syracuse, and Wichita. Daren Blomquist, vice president at RealtyTrac, explained that this drop in prices creates a problem for both banks and homeowners because neither wants to hold on to a depreciating asset. This increases the likelihood that homeowners will abandon their homes and banks may find that foreclosing on the home could be more expensive than writing it off.
The length of the entire foreclosure process is a major contributor to vacancy rates because homeowners are more likely to give up on their homes the longer they have to wait for a resolution. Blomquist explained that as foreclosure processes stretch on for years and years, homeowners begin to believe they will not be able to save the house and decide to move on with their lives.
In fact, several of these cities with the most abandoned homes are in states with very lengthy average foreclosure times. Palm Bay, for example, is located in Florida, where the average foreclosure process took 935 days to complete in the first quarter, the second-longest time among all states.
While lengthy and exhausting foreclosure processes encourage some homeowners to abandon their homes, in other cases, people intentionally move away early because they don’t fully understanding the process. With changing housing laws in many states, “homeowners may have more options than they realize to avoid foreclosure,” Blomquist said.
24/7 Wall St. reviewed the 10 metropolitan statistical areas with the highest vacancy rates among homes in foreclosure, based on data provided by RealtyTrac for the 100 most populous metropolitan statistical areas. RealtyTrac also provided metro-level median home prices, population, and foreclosure rates, all of which are for the most recent available period. 24/7 Wall St. calculated 12 month average home prices and year-over-year percent change from May of each year. RealtyTrac also provided the average length of foreclosure processes in each state, as of the first quarter of 2014. We also reviewed income data from the Census Bureau’s 2012 American Community Survey, and unemployment rates from the Bureau of Labor Statistics.
These are the cities with the most abandoned homes.