Vampires and Zombies in Housing? Oh, Yes!

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IRVINE, CA-An estimated 47% of bank-owned homes nationwide are still occupied by the previous foreclosed-on owner, dubbed “vampire foreclosures,” according to locally based RealtyTrac. In addition, 20% of all homes in foreclosure nationwide have been vacated by the homeowner, a phenomenon which the firm is calling “zombie foreclosures.”

According to Daren Blomquist, VP of RealtyTrac, vampire REOs will often look like normal, non-distressed homes on the surface, “but beneath the surface they represent a shadow inventory that is becoming more imminent as rising home prices motivate banks to sell off these homes to try to recoup their losses on soured loans.”

Zombie foreclosures, on the other hand, are “homes that are still languishing in the foreclosure process but have been vacated by the homeowner being foreclosed,” Blomquist adds. “Often, these homes are more-obviously distressed, falling into disrepair with no one to perform regular maintenance and upkeep. As such, they often represent a threat to the quality of the surrounding neighborhood, dragging down home values.”

In addition, the homeowner who left the property may not be aware that he or she is still responsible for property taxes and any other expenses that come with homeownership, says Blomquist, “leaving them in an even tougher financial spot when they discover this reality.”

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Fortunately, these threats to the housing market can represent bargain opportunities for pro-active buyers and investors, according to Blomquist. “Zombie foreclosures represent a prime opportunity for a short sale that helps the homeowner, the neighborhood and even the hesitant-to-foreclose bank in the process; while vampire bank-owned homes represent imminent inventor that you can act on before other buyers and investors are aware of it.

To learn how to capitalize on these monsters of the housing market, watch the video below.

As GlobeSt.com reported last week, sales volume and median prices for US homes is continuing to increase in most markets, and short sales and bank-owned sales combined account for one in four sales, according to. US residential properties, including single-family homes, condominiums and townhomes, sold at an estimated annualized pace of 5.6 million in August, up 2% from the 5.5 million pace in July and up 12% from the 5 million pace in August 2012.