The coining of a new real estate term has real estate experts running scared: recently, a leading realty tracking firm released a report on what it has termed “vampire” foreclosures, where the homeowners are still living in the foreclosed property. According to this report, these “vampire” foreclosures are artificially inflating the housing market, and could pose a real threat to the market values when they come up for sale. Here a foreclosure lawyer explains this monstrous concept.
Behind “Vampire” Foreclosures
According to a leading foreclosure lawyer, these “vampire” foreclosures, in which the tenant is still living in the foreclosure property, could number as many as 400,000 homes across the nation, concentrated in cities like Chicago and Los Angeles. The reasons for this particular type of foreclosure could be that the bank gave the owners a 90 day grace period to evacuate, or because the bank does not want to pay the upkeep on the foreclosed property. In any case, the thing that worries real estate experts is the artificial boost this is providing to the housing market. Eventually, these “vampire” properties must come onto the market, and the fear is that it could happen all at once, which could potentially flood the market and drive housing prices right back down. Those 400,000 properties represent a good ten percent of the current property market, meaning these fears could prove to be very well-founded.
Although “vampire” foreclosure is a frightening term, the connotation for the housing market could be more of a Biblical nature, if they all come onto the market at once and cause a Great Flood.