Housing and rental vacancies have hit unprecedented levels. Included in these record vacancy numbers are a plague of abandoned properties fated for demolition, and millions more homes being withheld from market. Of the more than 19 million empty homes recorded by the US Census, just under 2 million are up for sale, many of them in uninhabitable condition.
Even though the economy remains weak and the housing market, in particular, is still years from recovery, some news suggests that stronger growth can be expected as the year progresses.
A record 19.2 million U.S. homes are vacant, representing the highest number of residential properties that are vacant of all-time, according to the U.S. Census Bureau. The figure represents 14.5% of all the homes in America.
The dismal figure was issued as part of the Census Bureau homeownership quarterly survey for the first quarter of 2010. A total of 19,230,000 homes are vacant, according to the report. The same study shows that 10.6% of all rental properties in the nation are vacant, also an all-time record.
The report does not differentiate between homes that are inhabitable and those that are not. In particularly hard hit markets, including cities in Michigan and Ohio neighborhoods of abandoned homes are being demolished by wrecking crews hired to clear them. Many cities are considering the option of clearing whole neighborhoods, where vacancy rates top 50%, including Detroit. It costs about $6,000 to $7,000 to demolish a home.
The Census Bureau study estimates that there are about 131-million homes in the country and that nearly 4.5-million are currently for rent. The vacancy rate is the highest in the Southern region of the country at 13.2%. Some areas of the south like South Carolina have been hard hit by companies that have moved out of the U.S. out-sourcing the manufacturing of products.
Metropolitan areas have a higher rate of vacancies than communities outside of big cities, averaging 11.3%. The vacancy rate was the lowest in the Northeast at 7.5%.
However, the study also shows that a massive number of homes, 7,131,000 are being held off the market in limbo for a variety of reasons, which include impending foreclosures , short sales that went awry or homeowners that are unable to sell their properties as a result of other issues.
The foreclosure epidemic has resulted in a lower homeownership rate and continues to decline, showing 67.2% at the end of the first quarter nationally from 69.1% at the peak of the housing boom in 2005. Ownership rates hovered in the 64% range from 1985 through the mid-90s when political pressures and massive campaign contributions were made to Congressional candidates from special interests, including bankers and Wall Street.
Slightly less than 2-million homes are on the market for sale. Many are old and dilapidated, having outlived their usefulness. The blight of old rotting homes troubles inner-cities more than more suburban or rural areas.
My question or comment is: if the banks(government) would remove some of the restrictions they put on the small business investor in buying and selling by short sales or foreclosures, wouldn’t more people would be living in houses and opening up new and more secure mortgages and therefore boosting the economy and putting this country in a better place???
Frank – that’s a very good point. There seems to be a case of over-regulation by the federal government and it’s GSEs. Take a look at our recent article, “Government Handcuffs Real Estate Investors“.
Well I don’t think its an issue of “over regulation” because if the government had stepped in earlier when wall street came up with sub-prime loans, when wall street and sub-prime banks and lenders were coming out with programs that simply bankrupt peoples equity and savings, programs with high interest rates, balloon payments, interest only, differed interest loan. They (govt) would have prevented this crisis from happening. The previous administration allowed the market to run the show and the market has no interest in peoples well being but their bottom line and that’s a huge mistake on the part of the previous administration. Hopefully this administration will put a balance to everything.
Wrong: Government changed the regulation with “Community Reinvestment Act of 1977” and later liberalization of regulations gave lenders strong incentive to loan money to Low-income borrowers.
Combine that with: Government national Mortgage Association (Ginnie Mae) had been bundling and selling securitized mortgages as ABS’s; their AAA ratings had always had the guarantee that Ginnie Mae’s government backing had afford. Investors gained a higher yield than on Treasuries, and Ginnie Mae was able to use the funding to offer new mortgages.
So it was GOVERNMENT that regulated/de-regulated/incentivized this whole mess. It didn’t happen over night and took many other “acts” (both the act and government ACTS) to begin the tumble.
Instead of rewarding the poor to spend recklessly vs. invest wisely, instead of rewarding wall street with bailouts, instead of hurting the working man (politically correct working person) the government should reward small business with more tax breaks & tax incentives so small business can continue to support the economy as the backbone of American economics.
Well are you suggesting that Becuase of the”community reivestment act of 1977″ that banks and lenders are justifed to make products like 80/20 loans 1st lien 8% ,2nd lein 14 %, ARMs(adjustable rate mortgages) with penalties of up to 5% of loan amount, I dont think that this was the intetion for the reinvesment act of 1977. Yes the Government should have really looked into the details of the kind of loan programs that the banks had in their portfolio but anyways this is a capitalist society so the banks bully thier programs through anyway by donations and contributions to these government officials. This is a two way street the Government has a part to play and the banks and wall street have a part to play. But Hey Ron i think its a good idea to have more incentives for small business but that will only affect the job market but not necessarily the credit freeze in the real estate market.