BiggerPockets Daily "Zombie" Foreclosures Creep Into the Market
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Dec 6, 2025 Explore the intriguing realm of zombie foreclosures and their implications for the housing market. Learn what these abandoned homes mean for maintenance and market dynamics. Discover which states and metros are hotbeds for these properties and the financial hurdles contributing to their rise. Understand the importance of due diligence for investors looking at these unique opportunities, from title searches to inspections. Lastly, a look at historical foreclosure trends reveals a surprisingly stable market despite recent spikes.
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What A Zombie Foreclosure Is
- A zombie foreclosure is a property abandoned during the foreclosure process before it's completed.
- Vacant homes often fall into disrepair and create maintenance and seasonal damage risks.
Scale And Geography Of The Problem
- Adam Data found about 882,000 investor-owned homes were vacant in Q3 2025, roughly 3.6% of investor stock.
- Highest zombie rates concentrate in Rust Belt and Midwest states like Indiana and Illinois.
Why Zombie Foreclosures Climb
- Zombie rates are rising fastest in some northern and western states, with Colorado and Washington over 100% increases.
- Triggers include ARMs resetting, short-term flip financing, legal/title issues, and tenant or contractor damage.