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Unsuspecting homes are creating problems in neighborhoods all because of faulty mortgages. Sometimes the homeowners aren’t individuals, but rather investors.
Several states have been identified where properties are being abandoned after receiving a foreclosure notice—otherwise known as zombie foreclosures.
Nationwide, in the third quarter of 2025, there were about 24.9 million investor-owned properties, of which 3.6% (882,336 homes) were vacant, according to a new report by ATTOM, a firm providing property data and real estate analytics.
Indiana had the highest vacancy rates in investor-owned properties—7.2%, followed by Illinois (6.1%), Oklahoma (5.9%), Alabama (5.9%), and Ohio (5.8%).
The report notes that investor-owned homes are more likely to become zombie properties. Properties that are owned by investors usually are real estate assets bought to earn income through rent, resale, or quick flips, and while they can be profitable for investors, they often affect neighborhoods by driving up prices, leaving homes vacant, or neglecting upkeep when poorly managed.
In the Hoosier State, corporate investors now control and lease more than 40,000 single-family rental homes throughout Marion, Hamilton, Hancock, Hendricks, and Johnson counties alone, according to a Fair Housing Center of Central Indiana study.
Zombie foreclosures can leave struggling homeowners with unexpected costs, so it’s crucial to take action if you’re facing foreclosure.
“Irresponsible investors can also destroy [homes] by allowing properties to sit empty, declining to bring rental properties up to code, and neglecting tenants’ needs in instances where the home is occupied,” according to the Center for American Progress. “Additionally, investors that buy large quantities of properties in a single area can cause prices to overheat and increase market volatility.”
With over 1 million zombie foreclosures in Indiana, these properties can create prolonged instability for the original homeowner, the community, and potential buyers. Although the vacant lots appear harmless, oftentimes they lead to damaged credit, financial strain, increased crime, and lower property values in the surrounding neighborhoods.
“Vacant and zombie homes can hurt the value of surrounding properties and start a negative spiral in a local housing market,” said Rob Barber, CEO of ATTOM. “While we’ve seen the rate of zombie homes tick up a tiny bit this quarter, the overall rate of vacant homes and homes in the foreclosure process has remained remarkably steady.”
“While there remain some markets with worryingly high rates of vacancies, as a whole it appears that the nation’s buyers are quickly filling homes that become available,” he added.
State snapshot
Indiana is currently seeing a July median list price of $309,450, with more than 15,500 active listings. While it’s not identified as to whether a foreclosed property is individually owned or investor-owned, foreclosure listings in the state range from $1 properties to almost $600,000 homes with three bedrooms, three bathrooms, and a two-car garage.
(Realtor.com)
(Realtor.com)
Illinois—with 6.1% vacant properties—has a median list price of $323,225 with almost 21,000 active listings in July 2025. The most expensive foreclosed property in the state is a four-bed, 4.5-bath single-family home for $2,270,000 in Chicago.
“Located in the heart of Lincoln Park, this Warren Baker built home features an all-brick exterior with a center entrance that opens to an expansive floor plan which spreads over four levels of living space!” the listing reads. “The home is phenomenal, offers a value-add component which is not often seen in Lincoln Park! Get inside today to appreciate all this home has to offer!”
The Chicago listing also mentions that the basement is currently unfinished.
Oklahoma buyers should note that 5.9% of properties in the state are investor-owned vacant homes—that’s 1,469,100 properties. One of the newer listings is a $60,000 foreclosed property in Calumet, OK, with three bedrooms and two bathrooms. Photos of the listing show overgrown greenery surrounding the house, in addition to much of the home’s flooring appearing unfinished.
(Realtor.com)
According to the report, Alabama has a 5.9% vacancy rate with the median list price being $339,650 and over 20,000 new listings popping up in July 2025. Ohio rounded out the top five states with an investor-owned vacancy rate of 5.8% or 1,444,200 homes.
The states with the lowest vacancy rates in investor-owned properties were New Hampshire (0.9%), Vermont (1%), Idaho (1.2%), Utah (1.5%), and North Dakota (1.5%).