Real-estate market haunted by ‘vampire’ foreclosures
Vampire foreclosures are homes that have gone through the court proceedings and are bank-owned but are still occupied by their previous owners. Nationwide, 47 percent of bank-owned homes are still occupied by their previous owners.
The Palm Beach Post
Just in time for Halloween, RealtyTrac has issued a new report on “vampire” foreclosures.
Vampire foreclosures are defined as homes that have gone through the court proceedings and are bank- owned but are still occupied by their previous owners.
Why would the previous owners still live in them? Because they can, said Daren Blomquist, a vice president at the Irvine, Calif.-based RealtyTrac.
“They are accustomed to living there for free without any consequence,” Blomquist said. “And up until recently, the banks have not had a huge motivation to kick them out because home prices were not increasing and the banks had so many properties they were dealing with.”
Nationwide, 47 percent of bank-owned homes are occupied by their previous owners. Blomquist said vampire foreclosures will slow price appreciation as they start to go up for sale and tilt real estate more to a buyer’s market.
“These are still distressed properties and will typically sell at a cheaper price,” he said.
A slowdown in asking prices has already been measured by online real-estate analysis firm Trulia. Jed Kolko, chief economist for Trulia, said expanding inventory and a decrease in investor activity is leading sellers to lower their expectations.
“Asking home prices give us the first look at where home-sale prices are headed, and they point to a slowdown,” Kolko said.