The state ranks low in the rate of zombie foreclosures
October 29, 2020 Nora Caley
Here’s a statistic that heralds Colorado’s economic health: The state ranks low in the rate of zombie foreclosures. Those are
residential properties that are in the process of foreclosure and are sitting empty.
According to ATTOM Data Solutions, in its second-quarter 2020 Vacant Property and Zombie Foreclosure Report, about 258,000 homes in the U.S. are in the process of foreclosure, with about 7,652, or 3%, sitting empty as so-called zombie foreclosures.
In Colorado, 2,209 homes are in the foreclosure process, with only 28 of them, or 1.27%, vacant. That puts the state among those with the lowest zombie property rates, along with South Dakota, Idaho, New Hampshire, Utah, New Jersey and Connecticut. The states with the highest rates of zombie properties were Ohio (6.7%), New Mexico (5.5%), Indiana (4.8%), Illinois (4.7%) and Iowa (4.5%).
Also according to ATTOM, the nationwide total count of properties in the process of foreclosure in the second quarter is 258,024, down 8.8% from the first quarter. The decrease is due to the federal prohibition against lenders foreclosing on government-backed mortgages until at least June 30, 2020. The ban was enacted under the Coronavirus Aid, Relief and Economic Security (CARES) Act passed by Congress in March.
As for Colorado’s low rate of zombie homes, Todd Teta, chief product officer for ATTOM, points to economics. “The lowest zombie foreclosure rates usually show up in areas with the highest incomes, highest home values and lowest unemployment rates,” he said. “Those are the areas where homeowners have the most resources to stay up to date on their mortgages and avoid foreclosure altogether, or recover from it if a lender begins the foreclosure process.”
According to the U.S. Census Bureau, the median household income in 2018 was $61,937 in the U.S., and $71,953 in Colorado. The median home value in Colorado, according to a report from Business Insider and Zillow, is $397,820, the sixth highest among states.
According to the U.S. Bureau of Labor Statistics, Colorado’s unemployment rate in April was 11.3%, which ranked it 16th, and the national unemployment rate was 14.7%. The lowest rates of zombie properties are in the most expensive areas. “More than one in 20 properties facing foreclosure sit empty in about 40% of metro areas where the median home price is less than $160,000,” Teta says.
The 7,652 zombie properties represent one of every 13,000 homes in 99.2 million residential properties nationwide.