Thanks to foreclosed homes sitting on the market and depressed sales prices and property values, it is getting harder to move homes for sale in many areas of the country. While many real estate investors are finding ways to work around this, traditional homeowners are, in many cases, giving up and moving on. As a result, last week the national vacancy rate for residential properties hit 13 percent last week – up nearly 1 percent from 2007. These numbers were reported by the U.S. Census Bureau. This means “more downward pressure on home prices,” says chief economist for Metrostudy, Brad Hunter, pessimistically, predicting that things are going to continue to get worse before they improve.
The vacancies are not evenly distributed, either. Maine leads the nation with 22.8 percent vacancy, but Vermont, Florida, Arizona and Alaska also have vacancy rates of 15 percent or higher. However, in many of these states second homes or vacation homes may be contributing to the appearance of high vacancy rates, and when these vacation homes are removed from the equation Florida, Arizona and Nevada top the list with vacancy rates around 10 percent.
This information was released last week by the U.S. Census Bureau last week. Many analysts complain that these types of surveys by the Census Bureau are misleading and alarmist since the studies do not distinguish between types of vacancies. “Someone is home, at least part of the year” in many of the homes that are counted vacant, points out Dan DeWitt, a columnist for the St. Petersburg Times who wrote a scathing reprimand last Friday in response to these numbers, pointing out that the Census just asks participants to identify the property where they spend the most time and does not actually factor in vacation homes that are paid for and not delinquent or truly abandoned.
DeWitt roundly criticized reporting that “generously added to the percentage of empty houses and, well, didn’t do all they could to put the figure in perspective.” Do you think that this type of study is in any way useful to investors? Can any reporting on the housing market even be trusted?
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