11 percent of American homes are vacant -- UPDATED

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32 Responses to “11 percent of American homes are vacant -- UPDATED”

  1. Thebes says:

    Yet homelessness has reached record levels.
    Bankster bonuses have reached new records too.

  2. Anonymous says:

    Ritholz has been over this number, it’s largely meaningless: http://www.ritholtz.com/blog/2011/02/us-homeowner-vacancy-rate-is-2-7-not-11/

  3. TheAntipodean says:

    This is nothing. Australia already had 10% of houses vacant, and the lowest occupants-per-dwelling in it’s short history – and all before the housing bubble there started to burst. Just goes to show that giving tax breaks for people buying their second and subsequent houses (“negative gearing”) is even more stupid than giving people tax breaks to buy their own home (like in the US). Unless you wanted to blow a massive asset bubble and create massive inflation.

    • mn_camera says:

      The “second home” deduction will never be changed, at least in the US. The reason? Every member of Congress needs to maintain a residence both in their state/district and in the Washington, DC area.

      Simple, wrong, and highly unlikely ever to change.

  4. Drew from Zhrodague says:

    There’s a vacant house immediate across the street from me. There are a few on my road — I’m in one of the ghettos of Pittsburgh. Friends, long ago, suggested doing the quatting technique on this one house, which is now new and rehabed and vacant and for sale at near $460k. Mine, not that far away was $39k, but there’s lots of rehab work still to be done, after 4 years.

    For those of us that hate paying landlords enough to do something about it, this is a great opportunity to direct rent towards ownership. I also think it’s a great opportunity to buy into a local community, and have a stake in what goes on in that area. I fear that in the future, only corporations will own houses, and we’ll all be renters.

  5. Xenu says:

    Vacant? I find that offensive to the life-challenged. Cory is a ghostophobe.

  6. alllie says:

    And those empty homes rot and decay till they are worthless. Better the people who used to own them should have been allowed to stay there rent free. The ones that are still fit to live in should be given to people with low incomes…or no incomes.

  7. ritholtz says:

    That is a bizarre headline, misleading at the least by most standards.

    In this case, what CNBC wrote is technically correct, but its very misleading. The lowest this rate has been over the past few decades is 8.5%. So while 11% sounds shocking, it is only somewhat elevated after the worst housing crash in the US since the Great Depression.

    The typical data point used to describe vacant homes is the Home Ownership Vacancy Rate. In the US, that number is 2.7% for owner occupied houses and 9% for rental properties, apartments, etc. Hardly 11%

    (I addressed this here: US Homeowner Vacancy Rate is 2.7%, Not 11%
    http://www.ritholtz.com/blog/2011/02/us-homeowner-vacancy-rate-is-2-7-not-11/)

    The sensationalistic number referenced in the CNBC story (repeated by Consumerist) is not commonly used — indeed, its towards the end of the Census Bureau release that reports such things. No one who cares pays much attention to it.

    What it references is the total number of structures that are unoccupied — this includes a whole laundry list of empty properties — abandoned old farm houses, (Not sure if vacation properties/second homes are included — I need to check that). It provides very little useful insight. That is why knowledgeable Real Estate analysts use the Vacancy rate, which at 2.7%, generates a far less sensationalistic headline, and far less page views.

    I’ve written Diana Olick about this and other things before, as she occasionally gets the math wrong. The last time she got something terribly wrong was this gem of a post: Mortgage Defaults May Be Driving Consumer Spending
    (http://www.cnbc.com/id/36422316/), where, based on a single anecdote of one woman applying for a mortgage mod, she drew the absolutely wrong conclusion.

    Regardess, that 11% number is silly. The number that matters — the US vacancy rate — is 2.7%

  8. scionofgrace says:

    What condition are these houses in? (Never been owned, older but livable, condemned?) How long have they been vacant? (What kind of turnover rate do we have here?) Where are they? (Detroit? Other depressed areas?)

    Numbers are nice. But they leave so much out.

    • Antinous / Moderator says:

      Here in Southern California, there are plenty of empty homes that have never been lived in. They were built at the end of the housing boom. But we still can’t compare to Ireland, which has ~ 345,000 empty housing units for a total population of 4.5 million.

  9. Keith says:

    Nowhere does it say that the former occupants of these homes are all now homeless. Many were second homes while others were abandoned and their owners now become renters of smaller places. Some probably are homeless but living in your car under the bridge is not the default to loosing your mcmansion.

  10. Anonymous says:

    Rental demand rose? When did THAT happen? I’ve been unable to sell for 5 years this month. Between deadbeat tenants, it sits empty for months. I got 7 foreclosures and 4 houses for rent in that subdivision right this second.
    Being Feb 1st, be heading out tomorrow to tape a Pay or Quit to the door. 3rd month in a row, 6th time since April.

  11. Anonymous says:

    18.4 million empty homes?

    “According to the US Department of Housing and Urban Development, there were 643,067 sheltered and unsheltered homeless persons nationwide on a single night in January 2008.”
    http://en.wikipedia.org/wiki/Homelessness_in_the_United_States

    Will someone in our government please have a lightbulb moment?

  12. benher says:

    Huh… Pretty Vacant.

  13. bardofavon says:

    I thought 11% wasn’t that much at first. I mean yes it is a lot but as Antinous above said Ireland has an enormous percentage of houses that are empty.

    When you put it the way you did ie 11% of well over 100 million homes… that is just something else.

    I’m from England but when I visited California I was unaware of the property situation and I remember helping an American college student look for somewhere to live.

    I was blown away by the amount of room available firstly, Californians are lucky. I swear the average bathroom in California is probably bigger than the average house in Central London.

    Not only that but I was also blown away by how cheap certain houses were. I think it’s a pretty smart move by the banks to sell these houses cheap rather than let them rot. Better to make some money off them.

    I’m surprised to see that with these price drops homes still aren’t being sold. In Britain ever since the market broke the banks have been greedy and kept the prices high. Seeing this makes me think I was probably wrong and even if they priced them lower not many people could afford them. Pretty terrible situation.

  14. Anonymous says:

    And why do we need to build more? Everyone is obsessed about new home starts and permits and an economic indicator. Why, just to have more vacant homes?

  15. Miss Cellania says:

    What I see in my small town is for sale signs on every street -lots of them, and many have been up for years. However, people live in those houses, waiting for them to sell so they can buy elsewhere, or they are rented to people who would love to buy them if they could. Banks don’t want to lend out less than $50,000 for a mortgage, and most of these houses are priced lower than that. Many potential buyers might qualify for a lower amount -if the banks were willing to pay attention to those buyers.

    Meanwhile, very few people here are counted as truly homeless, but a lot of one-family homes are doubled and tripled up with relatives who can’t afford to get their own place.

  16. Anonymous says:

    Having worked as a Census worker in Northern California, I have to tell you that labeling a house ‘vacant’ didn’t necessarily mean ‘uninhabited’.

    Houses and apartments classified as ‘vacant’ meant no one person or family lived in that house more than six months out of the year; the abode did not constitute anybody’s ‘primary residence’. Now, when someone would answer the door, I’d be in the position of explaining that yes, while they may have mailed in Census forms for the place they live in most of the year, it was the job of us steadfast ‘enumerators’ to go door-to-door and check up on the residential status of every ‘place of habitation’ (which included the indentations in trailer parks where a trailer -had- been, and as a separate entity in-law units or detached structures with the same street address, which, if the structure was still there, got marked vacant). We used these demarcations to establish we didn’t need to fill out Census information for any one -person- at that house, and so we could stop driving by and dropping little pamphlets on their doorstep.

    If you were looking at only the Census status of houses and apartments in my rather posh area of California, you’d think half the houses were vacant mansions just asking for bourgeois squatters. You’d be mistaken. The reality is that nearly every listing was a second house, seasonal rental property (with nobody living there more than six months out of the year), or people had moved in after Census Day. Which, interestingly enough, was April 1st.

    Censuses are for counting people, not “vacancies” in the way used by this article; while it’s very good at the former, I’d hesitate to recommend the latter.

  17. Anonymous says:

    Spin it anyway you want but it’s still 11% which is a BIG number despite the occasional farm house. What is even more alarming is the direction and speed that number is heading to, aka it’s vector. Wasting bandwidth to paint over this poor housing picture is just that.

  18. wigg1es says:

    I’m willing to bet a very small percentage of these vacant homes are what you would consider move-in ready. I spent 3 years buying and rehabing/demolishing vacant and foreclosed homes and we didn’t buy a single house in our price range that had been vacant for more than 6 months (as per stipulations of our grant) that we didn’t have to put $20 grand or more into just to get it up to code.

    These properties are by and large the worst of the worst.

  19. Anonymous says:

    http://www.calculatedriskblog.com has significantly superior data than Ritholz. Especially check the Ubernerd archives penned by the departed and sorely missed blogger Tanta.

    CR posts solid information and if you choose to comment, be prepared to back up your claims with data.

  20. LydiRae says:

    I’ve been actively seeking out abandoned homes and shooting photos of them as references for paintings for a few years now. There seem to be a lot more disused or condemned properties in economically poor areas, like Alabama and Mississippi. While I find the places aesthetically beautiful, they’re sad at the same time.

  21. weatherman says:

    You know what might just solve this collapse in the housing market? A rational immigration policy. Right now there estimated to be as many as 20,000,000 undocumented immigrants in the US, most of whom are employed, paying taxes and who would otherwise be considered upright citizens, except for that citizenship bit. Allow them to develop a credit history, take part in the normal banking system, and actually save for a house here instead of sending money back to another country, and we could turn this housing market (and probably the economy) right back around.

    • bcsizemo says:

      Well that’s a double edged sword. Simply giving someone the ability to doing banking and saving legally doesn’t mean that they will follow the standard American “dream” of home ownership.

      If you are here to make money and send it back to your family, that is what you are going to keep doing. Giving people access to credit and savings is not really going to change that.

      Depending on the condition of these houses they should be “leased” out to people who need them. A LOT of stipulations should be put on these peoples. They should have to maintain these properties, have the ability to buy these homes when the market recovers (at a reduced rate), and they should be held accountable to the same standards as any other home owner (ie property taxes, appearances, ect.)

  22. hadlock says:

    Where’s the breakdown by state, Cory? Where is this headed? What will happen to this extra inventory? A sentence fragment followed by a quote without analysis, a blog post does not make. If I wanted 30 second news blurbs, I’d watch broadcast television.

  23. MrJM says:

    Invisible Hand, you’ve done it again!

  24. arbitraryaardvark says:

    when we were kids, we were pretty good at finding these and turning them into clubhouses.
    your typical suburb doesn’t have anything like a community center, tool coop, or town hall. there’s an opportunity here.
    right now i’m living in a nice old house i picked up for $7K after it had been sitting empty as a foreclosure for a couple years.

  25. InsertFingerHere says:

    Let me guess… also according to the Census, 11 percent of Americans are homeless?

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