Indiana has the nation's highest vacancy rate among investor-owned residential properties that were either being rented or flipped for a profit.
The Hoosier state has a 7.2% investor-owned residential vacancy rate due to a rise in so-called zombie foreclosures, where investors looking to fix up and rent out a home abandon the property after getting a foreclosure notice, according to a report by the property and real estate analytics firm ATTOM. Illinois ranked second nationally with a 6.1% vacancy rate among homes owned by investors looking for rental income or a quick sale, as distinguished from owner-occupied homes.
“Vacant and zombie homes can hurt the value of surrounding properties and start a negative spiral in a local housing market,” said Rob Barber, CEO of ATTOM. “While we’ve seen the rate of zombie homes tick up a tiny bit this quarter, the overall rate of vacant homes and homes in the foreclosure process has remained remarkably steady. While there remain some markets with worryingly high rates of vacancies, as a whole it appears that the nation’s buyers are quickly filling homes that become available."
Nationally, ATTOM found 222,318 residential properties across the country, the majority of which are owner-occupied homes, were being foreclosed on this quarter. About 7,519 are considered zombie properties that investors wanted to flip or rent but ended up abandoning.
Zombie foreclosures accounted for 3.38% of overall residential foreclosures, up 3.3% from the previous quarter and from 3.14% during the same time last year.
The zombie residential foreclosure rate in the Indianapolis metro stands at 35.5%. Nationally, it trails behind only Los Angeles.
Indiana University Northwest Economics Professor Anthony Sindone said that investors are buying up more homes across Indiana.
"My take on this is that the banks did not want to deal with the abandoned properties," he said. "So several investment companies are swooping to take control of at least some of these."
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