The real estate prices in the United States have hockey-sticked in the last year. People have left large cities, particularly on the east and west coasts as the COVID-19 pandemic has allowed them to work from home. Many have found less expensive communities with better quality of life. Prices in some central parts of New York City and San Francisco have dropped. However, almost everywhere else, real estate prices have moved up by double digits.
Among the other reasons for higher home prices are historically low mortgage rates and strong income growth among the middle and upper classes. Builders have tried to keep up with inventory. That has not worked in a number of markets.
Foreclosure rates have remained very low, after a drop that begun to occur at the end of the housing bubble which was part of the Great Recession. Foreclosure rates in 2007 and 2008 had hit very high levels and only began to taper off more than a year later.
Foreclosures have not disappeared completely and actually began to tick higher in the second quarter according to real estate research firm ATTOM Data Solutions. In its Vacant Property and Zombie Foreclosure Report, it said “The report reveals that 223,671 properties are in the process of foreclosure in the second quarter of this year, up 27.5 percent from the first quarter of 2021 but still down 13.3 percent from the second quarter of 2020.”
ATTOM looks at data by state and by city. Among cities, it breaks out the largest markets in the country. Properties facing foreclosures vacated by their owners hit 8,078 in the second quarter. They increased in 33 states and the District of Columbia. Across the 159 metro areas with populations of over 100,000, Peoria had the highest foreclosure rate “zombie rate” at 14.2%.
Will the upward trend continue? Todd Teta, chief product officer with ATTOM Data Solutions said, “The latest numbers show a spike in zombie properties during the second quarter that stands out compared to recent times, especially given the moratorium. It may simply be due to lenders foreclosing on homes that were already abandoned. We are watching that closely to see what it means and whether it’s the start of new trend.”