Rental Vacancies Over 10%
The top housing news item out this morning is the existing homes sales report. But also out is the first quarter of 2005 Census Bureau report which has a ton of numbers. Rental vacancies stand near all-time highs at 10.1%.
If you look at how they derive that number, you'll find a lot of houses aren't counted. Of 5.915 million "held off market" houses, 1.974 million are for "occasional use", 1.247 million are "temporarily occupied by persons with usual residence elsewhere" and 2.694 million are empty for "other reasons".
Of the 15.5 million total empty houses, about 12 million are vacant year round and 3.5 million seasonally vacant. With an estimated total of 123 million homes nationwide, that means 12.6% of houses are vacant. For every two rented units, there is an empty home, for whatever reason. The numbers vary by region but still, that's a lot of dark windows.
4 Comments:
I don't know how to put a positive spin on that NAR report. It's another win for the speculators and a loss for anyone renting. The homebuilder stocks are soaring again today. And all across America, the homebuying season is starting, and people are going to feel pressured to buy before the prices get even further away. Maybe there is time for one quick flip before this bubble bursts. Somebody talk me out of it.
Prices up, sales up, vacancies at all time highs. If it's not a bubble, wouldn't these measures slow down from time to time?
If you do try a flip, please let us know how it turns out. Good luck.
I won't try a flip. The case I was just looking out was a townhouse bought just sold for 680K and bought last year for 620K. I made the mistake of thinking that he kept the whole 60K profit. But when you subtract out the commission, transfer tax, carrying costs, etc. it is just not worth the risk of trying to pull off an illiquid investment with the bubble window closing. The reason I'm getting antsy is that I sold my home last summer and relocated to rental housing as part of a job transfer. The profits from my house are sitting in T bills not even earning the inflation rate after tax. Now I understand why even retirees want to play these high risk flipping games. There is no way for them to even preserve capital after inflation with interest rates so artificially low.
(The profits from my house are sitting in T bills not even earning the inflation rate after tax. Now I understand why even retirees want to play these high risk flipping games)
That's the perverse damage done with a negative Fed funds rate for 2-3 years. Just like a "boom" in housing isn't a bonanza, but a crisis, negative interest rates punish savers.
Great comments. Thanks.
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