Irvine, Calif.—In a recent report, RealtyTrac made public an analysis of U.S. residential property and vacancy rates in the first quarter of 2016. Using its publicly-recorded real estate data, including foreclosure status (zombie foreclosures), owner-occupancy status, and equity, matched against monthly updated vacancy data from the U.S. Postal Service, RealtyTrac announced the markets in the United States with the highest and lowest vacancy rates.
The top five most vacant cities in the United States were, in order of first to fifth: Flint, Mich.; Detroit-Warren-Dearborn, Mich.; Youngstown-Warren-Boardman, Oh.-Pa.; Beaumont-Pt. Arthur, Texas; and Atlantic City-Hammonton, N.J.
Among the findings of the RealtyTrac report was that nationwide, zombie foreclosures decreased 4 percent vis-à-vis the year-earlier period. But they continued to increase in number in a minority of markets. These markets were chiefly those known for a high number of blighted properties or a protracted foreclosure process, the company noted.
What exactly is a “zombie foreclosure”?
“RealtyTrac matched its address-level property data for nearly 85 million U.S. residential properties—including foreclosure status, owner-occupancy status and equity—against monthly updated data from the U.S. Postal Service indicating whether a property had been flagged as vacant by the postal carrier,” RealtyTrac vice president Daren Blomquist told MHN. “Only metropolitan statistical areas with at least 100,000 residential properties were included in the rankings.”
The report’s chief takeaway for housing developers is that markets with razor-thin vacancy rates below 1 percent are prime markets for developers to target, both for owner-occupant housing as well as rental housing, Blomquist said.
Among RealtyTrac’s findings was that in the Ohio markets—among them Columbus, Dayton and Cincinnati—occupancy demand is fueling a seller’s market for residential and commercial real estate.
Dayton and Cincinnati are not often thought of these days in the same breath with Seattle, Portland and Denver in terms of attracting residents from elsewhere. Blomquist was asked to name factors fueling growth in the Buckeye State.
He noted that while the number of vacant properties dropped substantially over the last five months in both Dayton (down 12.3 percent) and Cincinnati (down 12.9 percent), those cities still have high vacancy rates relative to the national average and more than twice as high as vacancy rates in Seattle, Portland and Denver.
“There are pockets in the Buckeye State attracting Millennials who are fueling more demand for homes and helping to lower the vacancy rate,” he noted. “The best example of this is [in] Columbus, where the share of the millennial population increased 16 percent between 2008 and 2013. In Cincinnati, we see this a bit, with a 6 percent increase in the Millennial share of the population. But drops in vacancy rates in Cincinnati and Dayton probably have to do more with those cities addressing blighted properties through land bank programs that either refurbish properties and get someone living there, or demolish the properties.”