New Epidemic Of Zombie Foreclosures Spreads Across America
The number of zombie foreclosures is surging in every state in the US according to the latest data. What does it mean for real estate investors?
Almost 8,000 zombie foreclosures are in process in the third quarter of 2020 according to ATTOM Data. Almost a quarter million properties were in the foreclosure process as of August.
These numbers may still seem small compared to 2008. Yet, there may be a lot more happening below the surface.
New Zombie Foreclosures
Zombie foreclosures are homes which have been abandoned by owners and borrowers. They’ve walked away, but the bank hasn’t foreclosed and relisted them yet. They are kind of in limbo. The owner gave up and left it vacant, but the bank isn’t selling it yet. This can lead to a lot of cosmetic issues from overgrown landscaping to vandalism. They can have a negative impact on the community and neighborhood, and cost cities and counties money to maintain.
What’s Coming Next
Unless the national economy pulls off a great turnaround in the next few months it is likely this metric will increase.
It is estimated that around 30% of US households aren’t able to make their monthly housing payments. While many are acting like it is business and shopping as usual, rumors are that there are a large number of auto loan repos happening, and credit card issuers like Capital One are reportedly slashing credit lines.
If things do play out like 2008, expect a huge number of foreclosures, even if governments and lenders carefully throttle how fast they hit the market.
There is a good chance that new businesses which are booming in the new normal and the next election will put the economy on a great trajectory. Though that may be a little too late for owners trying to make ends meet in the meantime, between loss of income in 2020 and new help coming in.
What It Means For Investors
The market may now seem hot and competitive in some places and for certain residential property types. Home sales and even prices just seem to keep marching up. This is the perfect market for real estate wholesalers to acquire distressed properties and sell fast for great margins.
Even if foreclosures do kick into high gear, it is good to remember that those who made it through the last crisis, and actually saw their incomes and wealth soar, were those who invested through it, wholesaling properties.
Don’t miss out on this once in a decade opportunity to rocket your finances for the better!
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