October 30, 2007

The one number the NAR doesn't want you to know: There are now 17,900,000 empty homes in America


17.9 million empty homes that nobody needed. 17.9 million empty homes that won't sell. 17.9 million empty homes that stand as a testament to American greed, largess and folly. 17.9 million empty homes for bitter renters to choose from. And 17.9 million reasons why this housing crash will be the biggest in US history.

The Census Bureau report also found that a record 17.9 million U.S. homes stood empty in the third quarter as lenders took possession of a growing number of properties in foreclosure.

The figure is a 7.8 percent gain from a year ago, when 16.6 million properties were vacant, the Census Bureau said. About 2.07 million empty homes were for sale, compared with 1.94 million a year earlier, the report said.

With inventories of unsold homes piling up near record levels, housing prices will have to fall further, economists say.

58 comments:

Euroman said...

Surplus paper-mache homes up by +1.1m this year. A job well done. Bravo.

Are you still expecting the Chinese to buy up all those unwanted houses? If you really belive this, you sure are a crazy greedy bunch of idiots overthere.

May B52 Bernake bomb you silly with all that funny money he's printing right now.

Anonymous said...

That number blows my mind.

17.9 million U.S. homes stood empty out of
128.2 million total homes

Thus 17.9 / 128.2 = 13.96% of homes are vacant

I repeat... 1 in 7 homes in the U.S. is vacant!!!

Holy FB, Batman!

Coke adds life said...

OH MAN -- that is FUNNY!

``Owning a home in this country has been a principal source of wealth creation for low- and moderate-income people,'' said Nicolas Retsinas, director of Harvard University's Joint Center for Housing Studies in Cambridge, Massachusetts. ``In the absence of home equity, families will inevitably spend less.''

TRANSLATION...

Home equity is the principal source of debt financing for low and moderate income people, and in the absence of home equity, people will have to live within their means.

I guess crushing debt is a Family Value.

tim73 said...

There are about 750 000 homeless people in the US (2005). So that would make about 23 empty houses per homeless person.

He/she can really be picky this time, choosing from vast numbers of empty rotting McMansions. Only those lowly meth addicted poor junkies would settle anything less than three bedrooms.

Artur from Chicago said...

I agree that this is really high, but I bet some of those are homes in places like Detroit for example, that have been downsizing due to poor economy for years now...

MarkIFC said...

I do a lot of marketing to Realtors. As a part of that, I visit 10 open houses each Sunday. On average, out of 10, 8 will be vacant. It shocks me. In most of the cases the sellers have bought and moved to a new home they had built. How long can they hold out paying two house payments?

borkafatty said...

Ya but but...

"things are different this time"...

They most certainly are.

Anonymous said...

Empty houses, many on land that used to be used for agricultural purposes. What a great use of farmland, especially with rising food prices. Why grow food when you can grow houses nobody wants or needs. LOL.

Ken said...

Our friends next door fell behind on their mortgage (illness and pending divorce), were "saved" from foreclosure about two years ago by a mortgage broker and his realtor wife who picked up their house for a song but let our friends stay and pay rent... and then kicked them out with 48 hours notice when they were late on a rent payment. They had to abandon almost all their stuff too. Man, did they need a lawyer.

The house stood vacant for 18 months but the new owners, after trying to get some of their friends to move in without success, have spent most of this summer frantically putting lipstick on it in hopes of selling it soon.

My (nice, generic middle class) block currently has at least two vacant homes -- one next door to us -- two FSBO's and one in MLS. Good luck.

hurin said...

How does property taxes get payed on those houses?

Does the county file a lien on the house or do they send the bill to the mortgage holders?

ChrisB said...

Take a look at the online listings. Half them are empty. The other statistic that realtors don't want you to see is the DOM. They're ballooning well past 100, even 200, days.

Under normal circumstances, you'd drop the price or take it off the market, but the fact is, the current sellers CAN'T because they need to get these homes off their chest before the weight of the mortgage suffocates them.

Shakster said...

Yup,and the rain came into So Cal to help knock down those fires.So much for reducing inventory.I thought 8 million would be tops...........ok,right.

real-world reality said...

The Bush Administration long ago secured a special place in history for the way in which it distorts, manipulates, or censors public information.

Specifically, the following:

Climate change scientists.
9/11 crime scene scientists.
Alternative energy scientists.
Economic trends and data.
Housing industry data.
Job and employment data.
Iraq war videos and photographs.
Iraq war statistics.
Election polls and results.
Stock market results and data.
Job approval ratings.

If you think America is now under control of an evil regime, you're correct! Hitler and his nazi members would be proud of the bush-co ABC, CBS, NBC, FOX and CNN republican crime network of thugs, liars and slime-buckets that deserve nothing less than life in prison for what they have done and CONTINUE to do.

1,000,000 humans dead.
-$2.5 trillion in the red and counting...

Our chilling US government evil-doers continue down their path for total world domination, power, money, oil and mass destruction at any cost. Peace and truth is NOT their ambition.

And if you never knew this, Hitler believed in Jesus and talked with Jesus daily.

Arrest Cheney and Bush now, or let's just forget about truth and justice in America. Just let them destroy what's remaining, and enjoy their evil lies and chilling network of criminal activities and anti-american elected government officials.

USA
1776 - 2001

MAKE YOUR MOVE!

Anonymous said...

real-world reality - The truth is that America died when Lincoln took office. While I won't say that his Constitutional abuses were all bad - the Constitution does stipulate for the suspension of habeas corpus in times of insurrection or unrest, and as an example, he did use that to detain Confederate soldiers interminably without due process. I take greater issue with his detainment and abuse of those who vocally challenged his martial policies.

Woodrow Wilson put more dirt on the casket with the creation of the Fed. The power of the Executive Branch grew to unprecedented levels until Nixon was deposed. Cheney has been fighting since that day to restore that imperial power to the President.

If anyone missed the Frontline episode on "Cheney's Law" from two weeks ago, I highly recommend that you view it on the PBS website:

http://tinyurl.com/2ut7uf

JLA

Stuck In So Pa said...

"hurin said...
How does property taxes get payed on those houses?

Does the county file a lien on the house or do they send the bill to the mortgage holders?"

Here in Taxsylvania, the mortgage holder gets a two-three year free ride on taxes, because no one will bid at a tax upset sale on anything with liens on it!
The government can't seize your property to just resell; it isn't in the real estate business. It can only transfer the original owners "interest" n the property (bill for taxes due.)
The bank will then work the unpaid taxes into the price when they do sell, a couple of years down the road!

Tangelo Mozilo said...

"How does property taxes get payed on those houses?

Does the county file a lien on the house or do they send the bill to the mortgage holders?"

---------------------------

Most mortgagees want to protect their collateral, so they pay the property taxes directly to the county to avoid the chance of late payments resulting in a tax sale. It is generally part of the mortgage contract that the mortgagee will act as a sort of middle-man, taking the tax payments from the mortgagor and sending them on to the county.

The mortgagee does this so that it can keep control of and monitor the situation. It doesn't want any nasty surprises two years down the line that the mortgagor has not been paying his property taxes
and now the collateral has a lien on it.

As far as I know, the mortgagor is always the one legally responsible for the tax payments, and the above-described arrangement is purely contractual. Therefore, if the parties do not arrange the mortgage contract in this fashion, and the mortgagor pays the county directly, it is concievable that the mortgagor could stop paying the taxes and the mortgagee would not know about it until it got served in a tax sale foreclosure proceeding. (I used to clerk for a Maryland judge who did these, and I saw it happen this way many times.) However, most tax sales occur with property that has no mortgage against it -- frequently, the owner is an older person who has trouble managing his affairs and does not realize that once he has paid off his mortgage, he must pay his property taxes directly.

The short answer to your question is: if a homedebtor is not paying his property taxes, the county puts a lien on the property. The county does not bill, or even warn the mortgagee.

This is kind of harsh for the mortgagee, who faces the specter of having his collateral sold out from under him. Consequently, the mortgage contract usually operates as described above.

Anonymous said...

I've seen dozens of local listings from a year or two ago have their DOM reset to look like they were just listed this summer.

Anonymous said...

Add mine to the list today...

I'm living out of a 1971 Pinto now

Frank@Scottsdale-Sucks.com said...

...and people wonder how I rent a million-dollar+ McMansion for 40% of the cost to "buy" it.

Anonymous said...

13.8% of the total housing stock is a mind-blowing number.

Does that include second/vacation homes?

Anonymous said...

Re Hitler/Jesus/Bush Administration:

I believe there is a name re the
latter days religious that fits:

SERPENT CHURCH...gives poor snakes
a bad name...I can't believe what I
see sometimes; it's as if the
"believers" believe they will never
truly have to 'fess up to God as long as they quickly say the magic words:
"I'm sorry, forgive me"....I think a little instrospection is called for...Jesus would turn over in his
grave, had he stayed put.

brokersleaveyoubroke said...

How does property taxes get payed on those houses?

The town sends the bill to the owner listed in town records. If no response they take possession and sell the house at a tax auction. this takes a few years. If there is a mortgage on the house the bank would forclose long before the town did. When the bank took possession then they would have to pay the taxes. If the back taxes are more then the house is worth then the bank would probably elect not to forclose and just let the town/city have it for taxes. A lot of those 17 million homes are places that nobody wants at any price.

brokersleaveyoubroke said...

Jeeez, Mozilo is all over the media this morning blasting the government for not doing anything about the subprime mess. The mess that he blames everybody but himself for. I had to do a double take. Mozilo is blasting people for making bad loand. Huh? Angelo, this may come as a shock to you but your company made a lot of those loans.
I can't wait to see Keiths' take on this.

FORECLOSUREBOY said...

As a bitter renter how do I find the time to look at 17 million homes to rent.

Someone should step up here and create a website to woo renters that is better than craigs list.

brokersleaveyoubroke said...

"The short answer to your question is: if a homedebtor is not paying his property taxes, the county puts a lien on the property. The county does not bill, or even warn the mortgagee."

Every place I've lived the town sent a tax bill. How would you know what to pay? They send it to the owner and the owner forwards it to the mortgage holder if they are paying the bill from an escro account. I know people who pay their own taxes and they receive multiple notices if they're behind. The town would much rather collect the taxes then go through the legal mess to forclose.

Anonymous said...

Those 17 million houses are not all $500,000 McMansions in Scottsdale like Frank would have you believe. Most of them are decrepit properties in the blighted inner cities of this nation. Drive through Baltimore some time and notice that there are thousands of early 20th century row houses standing empty with roofs and walls collapsing. Now add in Detroit, Pittsbugh, Cleveland, Chicago, NYC, you get the idea. Notice how there are only about 2 million houses for sale? Millions of these houses are either inhabitable or in a place where no one in their right mind would want to live. Add collapsing backwoods hovels and decaying farm houses to the urban dwellings and you're close to your 17 million number.

Shane Yancre said...

The real kicker on that figure is this:

Less than 3 million of them are for sale now. The others are being held as 'possible rentals', 'till the market turns', etc. But for how long?

Smells like 'supply glut'...

http://tinyurl.com/36rqfs

k.w. - southern ca. said...

Housing prices will definitely fall, but basic living necessities are now going through the roof.

I've noticed, on a daily basis, the new number of expensive cars and boats that are now for sale - especially boats, which loose their market value much faster than a car.

It's so alarming to see it happening so rapidly, but it tells me just how deep in dept so many people really are - across all income brackets.

Anonymous said...

AP Wire
President-Elect Hillary 'Evita' Rodham Clinton promises 17.9 million Section 8 vouchers to the shirtless ones.

Anonymous said...

Add mine to the list today...

I'm living out of a 1971 Pinto now


That's a classic car. It will only go up in value!

Anonymous said...

WHAT ABOUT THE UNCOUNTED 33, MILLION THAT ARE FILLED WITH THE UNCOUNTED ILLEGAL ALIEN MIGRANT IMMIGRANTS

YOUR FRIEND DOPEY said...

I AM SO DIGGING MY MCMANSION!!!

I USED TO HAVE ALL THESE NEIGHBORS THAT HATED ME!!!

GUY NEXT DOOR? FORECLOSED!!!

LADY ON THE OTHER SIDE? EMPTY!!! THE BITCH DIED AND ALL HER RELATIVES ARE FIGHTING OVER WHO'S GONNA PAY OFF HER NEGATIVE EQUITY!!!

HOUSE ACROSS THE STREET? YOU'RE RIGHT AGAIN!!! FORECLOSED!!!

YOU RENTERS GOT NOTHING ON ME AND MY EMPTY NEIGHBORHOOD!!!

I AM SO HAPPY HERE ALL ALONE NOW!!!

Irvine Reporter said...

Looked at open houses this weekend. So many were empty. REO and the like. Told me they want 830K for a shit-box. That is what the bank has in it. I just laughed. It is not different in Irvine these conceited assholes just think it is. 2008 is gonna be fun.

Anonymous said...

I am questioning the 17.9 million empty homes! How many of these homes are vacant due to being vacation/second homes? Are they including condos as homes or strictly single family homes? If only 2.07 million vacant homes are for sale then why are the other 15.83 million homes not for sale? Something doesn't sound right! I hope someone can explain! Keith maybe?

Thanks,

HBB said...

This is a graph of the vacant homes since 1965

Graph Of Vacant US Housing

Anonymous said...

HOLY SMOKES!!!!!!!!!

HAHAHAHAHAHA

SUCKA HOMEDBEBTORS.

tHE $1000 SALE WILL MOVE A NICE PORTION OF THESE.

shtove said...

Amazing figure.

In the UK - where prices are even crazier than S Cal - there are only 850,000 vacant residences in a population of 60 million.

The question is not how low prices will fall - but how can prices in bubble areas in the US ever again rise from those lows?

Just amazing - what were they thiiiinking!!!!

Frank@Scottsdale-Sucks.com said...

Those 17 million houses are not all $500,000 McMansions in Scottsdale like Frank would have you believe.

When did I ever say that? What I have said is that south Scottsdale is full of run-down 1950s ranches with a true value of around $100k (what they sold for in 2002 or so) and north Scottsdale is full of overpriced McMansions with a true value of around $180k (what a 2,800 sq ft house near Troon that I used to live in sold for in 2002).

You may be confused since I'm now in Newport Beach which is literally full of the high-end McMansions which are also crashing hard.

Frank@Scottsdale-Sucks.com said...

There are about 750 000 homeless people in the US

I thought it was more than that. When I was last in San Francisco a few weeks ago it seemed like there were 750k homeless there alone ... lol

Anonymous said...

wow all that and prices are down 1%...the horror, the horror, the horror

Anonymous said...

Anonymous said...

Those 17 million houses are not all $500,000 McMansions in Scottsdale like Frank would have you believe. Most of them are decrepit properties in the blighted inner cities of this nation. Drive through Baltimore some time and notice that there are thousands of early 20th century row houses standing empty with roofs and walls collapsing. Now add in Detroit, Pittsbugh, Cleveland, Chicago, NYC, you get the idea.


====================

DING DING DING

Give this man a prize. If inventory were really that dire, prices would have collapsed by now. The fact that prices have barely budged means that desirable homes are still selling.

If you are in the market for a shithole Detroit home, you can buy one for $20K. And at some point that was probably selling for $100K. Boom 80% decline in price.

I know it is a cliche but housing is local. And by local I mean to the zip code or even neighborhood level. I don't give a fuck what is going on in Las Vegas or Phoenix or Detroit. What I care about is in the 2 or 3 neighborhoods I want to live in where I live. It is almost impossible to find a house to rent, let alone buy. That's what matters to me. Whether inventory nationwide is 10 million or 100 million is irrelevant.

Tanglo Mozilo said...

Brokersleaveyoubroke,

Perhaps I was unclear. In my experience, the county does send a bill to the homedebtor, but does not send one to the mortgage holder. At least that's how things work in Prince Ghetto County, Maryland.

Also, you are correct that the county would rather just collect the taxes, interest, and penalties
instead of auctioning off the property. That's why you have to be TWO YEARS behind in Maryland before the tax sale process even starts. After that, the county sends you another warning before your property goes to auction.

Princess Mononoke said...

To the blogger's that brought up the property tax issue... Very good point that must be addressed.

Most of the prospective clients I have not been able to help out due to loss in home value, actually owed two years in back taxes! Ouch! The loans were originated without impounding taxes and insurance. YIKES!

They are determined to make their mortgage payments and have never been late. However, most are facing adjustable rate resets. It won't be long before the Tax Assessor claims that property though. Another very sad outlook!

Anonymous said...

Anonymous said...
wow all that and prices are down 1%...the horror, the horror, the horror

October 30, 2007 9:32 PM
---------
Case-schiller has prices down 4.5% dumb@$$.

4.5% may not seem like much, but on a 1/2 mil home thats 22,500 USD.

SO if you put 20% down you just lost 1/4 of your deposit in one year!!!

But with everyone putting no money down & an I/O loan thats pure negative equity of 22.5K in just 1 year alone!!

All this is a paper loss, but what if you need to move?

More importantly, what if you MUST refi because your I/O non money down loan is about to explode. Guess what, you can't refi unless you got the cash to cover the negative equity and PAY the refi transaction costs. Do you think a dumb@$$ that could not save the deposit is going to have that kind of cash just one year later? So that paper loss becomes a real problem.

But Ok, the adjustment is still several years away, so this person should be good right?

Wrong, down cycles in RE are long drawn out and painful, so this guy is going to lose 5% a year for the first few years then, it tapers to b/t 5% and 0%. By the time the down cycle is over they will be undwer water by 100k by the time the debt adjusts.

So efficient breach says stop paying on the loan & go into default. Now the bank has to write off 100K plus transaction costs.

FYI, in the interim the guy has not put a nickel into his depreciating asset + they stopped spending because of the negative wealth affect that goes with being underwater on such a huge loan.

Now lets add in inflation and overall these years real prices are off even more.

You just do not get it. This is real and this is going to be some serious economic pain for a very long time!!!

Frank@Scottsdale-Sucks.com said...

wow all that and prices are down 1%...the horror, the horror, the horror

Down 1% from when? An hour ago?

DOPE. (Since it's probably "DOPES" posting this nonsense.)

Kent said...

MarkIFC said...

I do a lot of marketing to Realtors. As a part of that, I visit 10 open houses each Sunday. On average, out of 10, 8 will be vacant. It shocks me. In most of the cases the sellers have bought and moved to a new home they had built. How long can they hold out paying two house payments?

- - - - - -

This shows how so many of the sheeple are not in tune with today's market, or they would (hopefully) never take that risk!!!

Kent said...

To all who keep hanging their hat on the "real estate is local" excuse, maybe the absolute level of pricing is local and to some degree the trend, but in my 51 years I have never seen such a widespread housing downturn. It is Nationwide! - in virtually every LOCAL area! As soon as things just started to slow, wishful thinking realtors were calling it the "bottom." the fundamentals (cash flows vs. prices) have barely BEGUN to readjust. What - do these guys think the median home price is just going to suddenly get happy, turn around, and go to $350,000 - $450,000, or more!? Stocks crash quickly - real estate takes time. Sorry to have bear the bad news, ladies!

Anonymous said...

Most of them are decrepit properties in the blighted inner cities of this nation.

Yes, like Miami, San Diego, Phoenix, Las Vegas...all look like Tijuana and Havana.

Hey, how's that water shortage in GA, SC, NC? Keep pumping more illegals in to use your water. Next to die of thirst: NV, CA, AZ, CO. You are a bunch of geniuses! But we understand, the GOP cronies like the processed food industry, NAR, Wal-Mart, auto industry, and bankers need an endless supply of illegals to buy their crap athte expense of taxpayers. Kepp voting for them geniuses until you don't have one drop of water to drink. I tell you what, vote for Giuliani, the last nail on your coffin.

Anonymous said...

Anybody remember the $1 HUD home sales?

Don't laugh its true and they will be available some time soon.

Anonymous said...

dear lol...even the sugestion of lolita may be a crime by some new law coming into effect ....

Anonymous said...

say nothing of screwball////

Mitchell said...

For some historical perspective, here are the figures from 1965 through to 2006.

Anonymous said...

the empty houses are the difference between the (too high) asking price and the market price. this is actually a sign that the economy is still doing well as few need to sell. when the sh*t hits the fan, lenders, investors and homedebtors will be forced to liquidate at market value (though auction forclosure/bankruptcy). inventory will drop as assets are sold for pennies on the dollar.

Mammoth said...

"There are now 17,900,000 empty homes in America"
------------------
Actually, Keith, the correct number is 17,899,999.

I sold my house yesterday.

Will put up more posts about the experience in the near future - you and all the others who visit HP will love it!

-Mammoth

Anonymous said...

Case Shiller down 4.5%. Oh goodness me. Down 4.5% after up 100%. So the house I bough in 2002 for $400K is only worth $765K now instead of $800K a year or two ago. My oh my, what will I ever do? How will I ever go on?

Come on renting fools is that the best you can do?

Anonymous said...

a very stupid person wrote:

Hey, how's that water shortage in GA, SC, NC? Keep pumping more illegals in to use your water. Next to die of thirst: NV, CA, AZ, CO. You are a bunch of geniuses! But we understand, the GOP cronies like the processed food industry, NAR, Wal-Mart, auto industry, and bankers need an endless supply of illegals to buy their crap athte expense of taxpayers. Kepp voting for them geniuses until you don't have one drop of water to drink. I tell you what, vote for Giuliani, the last nail on your coffin.

October 31, 2007 1:21 AM

=================================
Now I've heard it all. The GOP is to blame for the drought. May you liberal idiots just get funnier and funnier every day.

Well I guess Bush created Katrina in his secret lab so it all makes sense in your twisted little pea brained world.

Please do me a small favor and never have children.

Anonymous said...

not vacant for long...

everyday, with the fall in the dollar, those vacant homes go on sale for foreigners -- that's exactly who's holding up the market in NYC with droves coming over on shopping holidays.

but i don't think they'll show up in omaha anytime soon

Frank@Scottsdale-Sucks.com said...

On the "local" thing:

The prime catalyst now for the continuing crash in prices is the mortgage debacle, and sorry but that's national.

"They ain't makin' any more loans!"