No single-family rentals in five local zip codes; market is a mixed bag

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No vacancy signs were out for single-family residential rentals in five of the 35 local zip codes analyzed in ATTOM Data Solutions Q3 Vacant Property and Zombie Forecast.

For the record, a zombie is a residential property that the owner abandoned after receiving a foreclosure notice. It’s an early sign of potential neighborhood decay and is currently a non-issue in the Tri-Cities. There was only one zombie noted in the current report. It’s in the 37601-zip code in Johnson City.

The report’s tally of non-owner-occupied investment properties and the vacancy rates are a bigger local topic because much of the rental market is as hot as the rest of the housing market.

The report noted a little over 52,146 single-family residential investment properties. That accounted for a little over 30% of all residential properties in the zip codes analyzed. That’s down from 40% last year. Attribute the decrease to owners taking advantage of the sizzling seller’s market.

The region’s overall vacancy rate is 5.2%. That’s the same rate as what was reported for the state and higher than the 4% national rate.

While there were five local zip codes with no vacancies, another 13 were higher – some substantially higher – than the local or national rates. Hampton, 37665 in Kingsport, Bulls Gap, and Rogersville had vacancy rates in the 11% to 13.6% range.

Abingdon, Damascus, Duffield, Gate City, Glade Springs, and Meadowview were the no vacancy zones.

The housing price boom has continued roaring ahead in 2021 in the Tri-Cities and across the nation. It has and continues to produce double-digit gains in many U.S. and local sub-markets, almost no blight stemming from vacant properties in foreclosure. That has happened despite economic damage to major sectors of the U.S. economy connected to the Coronavirus pandemic that hit early last year. But the number of foreclosures – and with it, the number sitting vacant – is almost certain to increase because the federal government recently lifted a 15-month moratorium that had prevented lenders from taking back properties from homeowners who fell far behind on mortgage payments during the pandemic, according to the analysis. An estimated 1.5 million to 2 million homeowners were in some kind of forbearance when the moratorium ended in July 2021.

“Vacant properties in foreclosure, and the resulting potential for neighborhood decay, continue to be a non-issue overall in most of the country. But that could easily change over the coming months as lenders are now free to take back properties from delinquent homeowners,” said Todd Teta, chief product officer with ATTOM. “How much, how fast, and where that happens will depend on how different banks approach the situation. Some may decide to vigorously pursue foreclosures to recoup losses from the pandemic, while others give homeowners more time to get back on their feet. But it’s hard to imagine that zombie foreclosures will continue to be so few and far between across the national landscape.”

ATTOM analyzed county tax assessor data for 98 million single-family houses and condos for vacancy, broken down by foreclosure status and owner-occupancy status. Only metropolitan statistical areas with at least 100,000 residential properties and counties with at least 50,000 residential properties were included in the analysis.

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