Banks are sitting on hundreds of thousands of vacant homes that are in foreclosure and repossessed properties at a time when housing inventory is at a low point, RealtyTrac said.
Roughly 20% of all homes in foreclosure are vacant but banks have not taken title to
Another 375,000 homes have gone through foreclosure but are not being actively marketed, the Irvine, Calif., data firm found. Combined, the 525,000 homes would boost the five-month supply of 2.2 million existing homes for sale by roughly 24%.
Daren Blomquist, a RealtyTrac vice president, says the lengthy foreclosure process is only partly to blame for keeping these "must-sell" properties from being sold. Even if these homes flooded the market simultaneously an implausible scenario they would not cause "the once-feared double dip in [home] prices," Blomquist says, since buyer demand is strong and supply is constrained by the fact that many homeowners still owe more on their mortgage than the homes are worth.
"This would be a good time for banks to list their properties and get them sold," he says. "This is a market where there's a shortage of inventory and some of these foreclosed homes have been held back and are sitting in limbo."
Bank of America (BAC) has the highest percentage of the vacant properties in foreclosure, with 23%, followed by JPMorgan Chase (JPM) with 21% and Wells Fargo (WFC) and Citigroup (NYSE:C) with 20% each, RealtyTrac found. Florida has the highest number of vacant homes with 55,503, followed by Illinois with 17,672 and California with 9,802, the data shows.
