Feb
10

Zombie Foreclosures Continue to Prove a Difficult Enemy for Recovery

February 10, 2014

Zombie foreclosureWhile you may be most familiar with zombies from shows like “The Walking Dead,” there’s a whole different kind of zombie lurking in the Chicago area. Abandoned “zombie” foreclosures are a rising issue in Chicago real estate. Defined as a property where a foreclosure has been filed but has not been resolved in more than three years, zombie foreclosures leave the borrower and the servicer without clear control of the property and little incentive to take responsibility.

Like the evil creatures they are named after, zombie foreclosures continue to grow, and if the trend continues, there will be an additional 7,200 zombie properties in Cook County, including nearly 3,200 in the city of Chicago, by 2015. Between 2008 and 2010, they accounted for 8.7 percent of the foreclosures in Cook County. Fortunately, zombie foreclosures don’t eat brains, but they do gnaw away at prices in the areas in which they are located, creating a blight upon neighborhoods. With no one taking responsibility for these properties, they could drag back the progress that Chicago has made in gaining higher prices and monthly sales.

Another issue is that zombie foreclosures are disproportionately concentrated in lower-income communities. Properties in census tracts in the three lowest income quintiles (bottom 60 percent of income) are more than 10 percent more likely to become zombie properties than are properties in census tracts in the top two highest income quintiles, a report from the Woodstock Institute found. Furthermore, the bottom two income quintiles (bottom 40 percent of income) contain 57.5 percent of zombie properties, while only 22.5 percent of zombie properties are in the top two income quintiles.

Do you have an idea of how to deal with the zombie foreclosures? Let us know in the comments!

About The Author

Read All Stories By Mitch Levinson

Mitch Levinson is the author of “Internet Marketing: The Key to Increased New Home Sales” published by BuilderBooks. He is an Internet marketing expert with expertise in search engine optimization, website development, email marketing, social media and CRM consulting services. He is known for creating effective programs that can be tracked through analytics to prove effectiveness and ROI. Mitch is founder and president of MLC New Home Marketing and MLC FlatFee Realty, as well as managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Chicago and Atlanta. He currently leads the Chicago team. A Multi-Million Dollar Sales Producer who earned an MBA in Computer Information Systems and eCommerce, he brings a unique perspective and experience to the field of real estate communications. Mitch combines the two interests in order to help home builders and developers gain a competitive advantage through the Internet and technology. When he isn’t behind a computer, he enjoys participating in sports and coaching his kids’ teams. Mitch resides in Arlington Heights, Ill., a northwest suburb of Chicago, with his family, which includes two rambunctious labs. Visit my Google+ profile.

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