There’s a house on the corner of Sycamore and Main in a quiet Midwestern town—white picket fence, windows boarded up, grass reaching knee-height, mailbox hanging by a single screw. No one has lived there in years, and yet, it hasn’t technically been abandoned. It’s just... stuck. Frozen in the no-man’s land between foreclosure and resale. Around here, they call it a “zombie.”
And it’s not the only one.
All across parts of the U.S., especially in rural counties and post-industrial cities in the South and Midwest, these so-called zombie foreclosures are quietly multiplying. According to a recent report by real estate data firm ATTOM, the second quarter of 2025 saw over 7,300 properties fall into this strange limbo—technically still in the foreclosure process, but already left behind by their owners.
It’s a term that sounds like something out of a Halloween special, but for the neighbors who live beside them, these homes are anything but a joke. They decay silently, often becoming magnets for pests, squatters, or worse—memories of economic dreams gone wrong. For nearby homeowners, they’re like bruises on an otherwise healthy block, lowering property values and raising anxiety.
You might be wondering: how does a home become a zombie?
Imagine this: you own a modest house in a small North Carolina town. You lose your job. Bills start piling up. One morning, a foreclosure notice lands in your mailbox like a death sentence. Maybe you don’t have the energy—or the incentive—to fight. Maybe the house is worth less than your outstanding mortgage. Maybe the roof needs replacing, the plumbing is rusted out, or the neighborhood’s seen better days. So, you pack up, leave, and hope the bank takes care of the rest.
Only, sometimes, the bank doesn’t. Especially if the house isn’t worth the trouble.
That’s how neighborhoods get stuck with ghosts.
In the second quarter of 2025, ATTOM found that zombie foreclosures made up about 3.3% of all homes in the foreclosure process—only a slight uptick from the previous quarter, but still higher than last year’s 2.9%. It might not seem like much. But when those homes are concentrated in a few counties, the impact becomes far more visible.
Take North Carolina, for example, where zombie cases jumped more than 50% year-over-year. In Iowa, the increase was nearly identical. Texas saw a 52% rise. These aren’t just numbers on a spreadsheet—they're boarded windows in Wichita Falls, overgrown yards in Columbia, South Carolina, and moldy carpets in Des Moines.
Economist Jiayi Xu at Realtor.com® explained the trend with a mix of realism and resignation. “Many of these counties are rural, where home values are relatively low,” she noted. “So when hardship hits, homeowners often walk away rather than negotiate a payment plan. There’s just not much incentive to hang on.”
And that sentiment cuts both ways. Banks, looking at the cost of completing a foreclosure, maintaining the property, and trying to resell it—only to maybe lose money in the end—sometimes just drop the process altogether. The house lingers in a legal purgatory, ownerless, unsold, unwanted.
Even entire neighborhoods can begin to fray at the edges. In places like Wichita, Kansas, over 12% of homes in foreclosure have become zombies. Peoria, Illinois—home of Caterpillar and crumbling factory belts—sits just behind. Toledo, Cedar Rapids, Cleveland: different towns, same problem. Often, they share a history of industrial decline, aging infrastructure, and property taxes that bite harder than the homes are worth.
In Illinois, for instance, property taxes are the highest in the nation relative to home value. It’s no wonder some homeowners feel like their bills are chasing them out the front door.
But zombie homes aren’t confined to the heartland. Even hurricane-prone Florida has seen a creep of the undead. In cities like Deltona and Tampa, rising homeowner association fees and spiking property insurance have driven people to give up, often after a single major storm drains their savings.
One zip code in Peoria—61605—topped the nation with a zombie foreclosure rate of 51.9%. That means over half the homes in foreclosure there have been abandoned mid-process. In Cleveland’s 44108, it’s 42.2%. These aren’t just forgotten buildings. They’re cautionary tales told in drywall and broken shingles.
Still, it’s not all doom and boarded-up gloom.
Despite the recent uptick, zombie foreclosures remain a small slice of the overall market. In fact, in most places, properties in foreclosure are still getting snatched up relatively quickly—before they can slip into decay. ATTOM CEO Rob Barber offered a cautious note of optimism: “Fortunately, we’re not seeing a widespread increase in homes left vacant due to foreclosure. That’s good for families, communities, and the market overall.”
And that brings us to an interesting question: Should you buy one?
Well, that depends on your appetite for risk—and your willingness to see potential behind plywood.
Some zombie homes hit the market with eye-popping prices. In some cases, listings go as low as $1—yes, one dollar—but don’t start fantasizing about flipping it into a dream home just yet. That’s usually the auction’s starting bid, and these homes are almost always sold as is, sight unseen.
No inspections. No warranties. Sometimes, you can’t even peek inside.
Jeremy Beres, a real estate agent in Columbus, Kansas, recently listed one such property—a 125-year-old Victorian with original pocket doors and ornate wooden staircases, quietly crumbling in the center of town. “It has charm,” he admitted, “but you never know what’s behind those walls. Could be rot. Could be raccoons.”
For buyers willing to roll up their sleeves, zombie foreclosures can represent incredible opportunities. They’re cheap—often dramatically below market value—and if you’re handy, or know a trustworthy contractor, you could breathe life back into a property and build equity quickly.
But caution is key.
Empty homes are magnets for all kinds of problems—water damage, vandalism, pests. And foreclosed properties might come with legal baggage: tax liens, unresolved claims, or HOA disputes.
Beres puts it plainly: “Do the math. And make sure it’s a deal you can live with—literally and financially.”
So what can communities do to fight back?
Some towns are getting proactive, tracking vacant properties and working with nonprofits to rehab them. Others are offering tax incentives for buyers willing to fix up foreclosed homes. In a few places, like Cleveland and Detroit, local land banks are stepping in to buy, stabilize, and relist zombie homes before they rot.
But the real key, most experts agree, lies in prevention. That means better communication between banks and borrowers, smarter foreclosure timelines, and housing policies that protect both the market and the people living in it.
Because at the end of the day, no one wants to live next to a ghost.
And if you’re thinking about buying a zombie property? Bring a flashlight. And maybe a priest.