I purchased a list of absentee owners from my county property appraiser for a direct mail campaign. However, I'm considering buying a list of code violators for direct mail also. Any advice on which list would provide better leads? (I imagine there might be some overlap between the two lists). Also, am I wrong for assuming the code violators list would be more likely to have occupied homes?

The code violators list sounds like an interesting lead source. That being said, I'd recommend you start with the absentee owners list. Make sure you mail out in large enough volume (e.g. 500-1000 people) and regularity (i.e. in a targeted one month campaign to the same people or monthly). You should get enough leads from that to get you started. 

I understand the rationale for the code violations list but its probably unnecessary at this point and you're just giving yourself extra work to do, especially if you're just getting started. Maybe after you've mailed out the to the absentee list, you could do a separate campaign to the code violators with a postcard like "I saw via the public records your property had a code violation and you received a fine. Let me buy your property so you don't ever have to deal with this again." or something like that. 

Good luck and let us know how it turns out!