Home » 2008 Real Estate Predictions » United States Has 129.4 Million Homes- 18.6 Million of Whom Are Vacant

United States Has 129.4 Million Homes- 18.6 Million of Whom Are Vacant

Empty_house_interiorThe United States real estate market has an inventory problem. When there are over 18 million empty homes across the country we have no reason to continue to build new homes. If this were a logical marketplace we would tell builders to take a 2 year moratorium until absorption met demand.

Instead we have builders building 2.1 million homes last year. Yikes! And of those homes almost half of them are now sitting empty. The speculative years between 2000 and 2005 drove construction of homes not based upon need in the marketplace but demand created by speculators. When that demand dried up many of these homes are sitting empty and forlorn.

Now we see in the first quarter of 2008 construction is down significantly which is a great thing. The key thing is to get rid of this overhang in inventory and fill up some of the homes. Once that occurs the market can regain it’s equilibrium and prices will stabilize.

The homeowner-vacancy rate rose to a record 2.9% in the first quarter from 2.8% in the fourth quarter, about 1 percentage point higher than normal. The vacancy rate has jumped in all four regions of the country, as well as in cities, suburbs and rural areas since the housing bubble exploded.
The total U.S. housing stock increased by 2.1 million to 129.4 million in the past year, with about half of that gain accounted for by the increase in vacancies. Much of the newer stock of housing is vacant, the data show.
Of all housing units built for owner-occupancy since April 2000, 10.2% were vacant, up from 8.8% in the fourth quarter and 4.7% two years ago.
While the vacancy rate for single-family homes has risen to 2.5%, the most dramatic increase in vacancies has been in smaller condominium projects. via Marketwatch

6 comments

  1. More vacant homes are on the market in my marekt area.

  2. I am curious as to how many total dwellings are in the U.S., in cluding apartment,condos and single family homes.Does anyone have a estimate on this issue? Fell free to e-mail me with any estimates you might have available?

    Also, is there any information on which country's have the potiental for an influx of population, from other country's. Be it for retirement or to escape economic despare from the country they currently live in?

    • I thought that is what this artical was trying to project at 129.4 million, but maybe not …. meaning free-standing houses only. With 2.57 persons per household, our need is roughly 121 million all total, and if the quoted 129.4 million is free standing only, we are in much deeper than might be otherwise supposed.

  3. Housing prices are back between 1999 and 2002 levels.
    Previously owned homes are selling well below the cost of construction.

    According to Lucia Mutikani in her March 21, 2011(Reuters) article, new houses are selling for 45% higher than existing home prices.

    NAR said the median home price dropped 5.2 percent in February from a year earlier to $156,100, the lowest since April 2002. Foreclosures and short sales, which typically occur below market value, accounted for 39 percent of transactions in February 2011. Existing home prices need to be offered below foreclosed and short sale prices just to spark interest and allow the banks to finance them.

    You have a housing “caution light” for the next 7 to 10 years. The stock market, unemployment, Japans’ tragedy, Middle Eastern unrest, the oil fears, and a weak dollar will lead to the inevitable inflation that always follows a recession.

    Solutions To the current Housing challenge:

    •We could tear down, part out and recycle the old existing 1.5 million home inventories. The wood, wiring, copper plumbing, cabinetry, and other materials could be sold and used to build new affordable rental housing. The nation’s excess inventory of homes could be replaced with affordable duplex, triplex and apartments to help balance the rental market.

    •We could encourage our children to live on their own. Making financial independence a desirable attribute and create a “trendy market” of new home buyers and tenants.

    •Or we could stop building new homes and promote renovation until natural growth consumes our current housing excess. This realistic solution is seen as a detriment to the lagging construction industry. Who was it that overbuilt to create the existing housing bubble in the first place?

    Liquidity and mobility are the keys to the future. Cash buyers and traders will take over the middle class market. Renting will be the only option for people having to stay in the ever changing job arena. The responsibilities of Homeownership will only appeal to property management entrepreneurs, young families, the retired and the rich.

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