What this means:
* Rents will stay low
* Prices will keep falling
* realtors will keep lying
* Drastic government intervention into the free market is on the way
What will we do with all these empty homes? How can we as a nation have been so incredibly stupid? And what will become of vacant-home foreclosure ghost towns like Maricopa Arizona? Time to send in the bulldozers?
Home Vacancies Set Record
The share of homes vacant and for sale, an important measure of the nation's housing supply, set a record in the first quarter in a signal that the glut of homes on the market isn't improving.
The homeowner vacancy rate, which measures the number of vacant homes for sale, rose to a record 2.9% in the first quarter from 2.8% in the fourth quarter, about one percentage point higher than normal, according to new Census Bureau data. The vacancy rate has jumped nationwide and in cities, suburbs and rural areas since the housing bubble popped. From 1995 until the fourth quarter of 2005, the rate held between 1.5% and 2%.
About 2.2 million vacant homes were for sale in the first quarter, up from 2.1 million in the fourth quarter and about one million more than was typical before the housing bubble burst.
Economists say the rising vacancies indicate that home prices won't stop falling and home builders can't ramp up construction until the glut of vacancies can be worked down.
"It's the worst piece of housing news that we've heard in the past couple of months," said Patrick Newport, U.S. economist at Global Insight. "It means home prices will continue to drop at least for the remainder of the year."
Meanwhile, a record 4.1 million vacant homes are for rent, with the rental vacancy rate rising to 10.1% in the first quarter.
April 29, 2008
A nation of 300 million people has nearly 20 million vacant and unwanted homes. "Home Vacancies Set Record"
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36 comments:
"Drastic government intervention into the free market is on the way "
This may sound like a troll post but I don't know how to react any other way at this point: I think its so cute when people say things like "the free market"...
as if there's no forces acting or pulling on market forces until the dreaded hand of the "government" officially comes into play... I would have thought that the recent and unfolding events would have put this beast to lie finally.
Come on, does anyone really believe there's such a thing as a 'free market' as such a statement implies ?
20 million vacant homes? I'm missing something in the maths
2.2 million for sale.
4.1 million for rent.
6.3 million, but I went to public school.
U.S. Home Vacancies Rise to Record on Foreclosures
A record 18.6 million U.S. homes stood empty in the first quarter as lenders took possession of a growing number of properties in foreclosure.
The figure is 5.7 percent higher than a year ago, when 17.6 million properties were vacant, the U.S. Census Bureau said in a report today. The vacancy rate, the share of homes empty and for sale, rose to 2.9 percent, the highest since the bureau started keeping count in 1956. About 2.3 million empty homes were for sale, compared with 2.2 million a year earlier, the report said.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aHHKvtb594Fs&refer=home
How many vacant homes not listed on the MLS but rather FSBO?
How many vacant homes where the flipper is "waiting for the market to improve"?
How many vacant homes that the banks are sitting on?
Do the builders report their own numbers?
Would the builders over or underestimate the number of "empties" that they need to get rid of?
Maybe not 20 million as your post says, but probably far more than is being reported.
ooops...you posted that link right after I responded.
I change my guess.
I'll bet that 20 Million is an underestimation.
It's only a "free market" until the Haves get their tits in a wringer. Then, like all good conservative Americans they turn into raving lunatic socialists.
Keep voting republican. You're paying $4 a gallon for gas, your cost of living is through the roof, your job is in jeopardy and your pay is stagnant.
Thanks to 30 years of conservative fiscal policies.
I figure in another decade lots of you blue collar folks will be living in tents. ENJOY, Reagan democrats!
I hear people talk about transforming the unused houses into apartments... cause that's what they did to the single family brownstones in NY after the Depression. But those things were built to last. These new houses are built to fall apart. Bad flashing and mold growing. Nails popping out and cement cracking from the very first day. Not to mention bitter foreclosed home"owners" trashing the place and copper wires being stripped. It's just a massive waste of capital, in far flung exurbs, that are going to have to be torn down.
Isn't the obvious solution to open the floodgates to mass immigration? The houses get filled, the new occupiers will use local services and help stimulate the economy.
With a presidential election not so far away, right now would be a great time to raise the issue.
Somehow, I just can't see it happening that way.
Will there be a demolition bubble next or does the USA expect roughly 120 million additional immigrants to fill all these unwanted houses?
Either way you are screwed.
houses can be empty and not for sale.
What's not in the stats are the millions of homes owned by upside down failed flippers who are renting them out at negative cash flow in a desperate attempt to hang on long enough for the market to turn around so they can sell them...
I know where there are 1 billion Indians and 1 billion Chinese ready to take possession of those homes.
All we need to do is let the flood gates open.
Isn't the obvious solution to open the floodgates to mass immigration? The houses get filled, the new occupiers will use local services and help stimulate the economy.
No, jackass! The obvious solution is to lower the f*cking price to the level where responsible, middle-class Americans can afford them (pre-bubble levels). The illegal alliens of the last few years were only able to afford these houses because of clown loans that are no longer offered. No the illegals are walking away from them.
Take your amnesty argument elsewhere.
Its a "free market" as long as the rules are set and remain the same. The drastic government intervention is due to the REIC's massive lobbying machine. Individuals do not have sway with the gubmint.
We can rest assured that any bailout will only really help the corporate interests, and will only serve to enslave the people.
Cheers.
BUT, BUT, BUT, LAWRENCE YUN AND THE NAR SAY I BETTER BUY NOW???
DOPES!
"Isn't the obvious solution to open the floodgates to mass immigration? The houses get filled, the new occupiers will use local services and help stimulate the economy."
Hey genius, if you read the news you'd know they didn't build any schools or other infrastructure to go along with all these new homes. I don't like seeing kids in trailer classrooms and people waiting for days in the ER, do you?
Time for a 'Homeland Security Housing Bank' purchase of all vacant homes to:
1 stop the terrorists from living in those houses..
2 put in place mass evacuation housing for displaced folks after the next attack..
I'm sure the bill has already been drafted... just waiting for the next code red moment to enact.
I know where there are 1 billion Indians and 1 billion Chinese ready to take possession of those homes.
anon nailed it, that indeed is the plan. That, and bulldozers.
Illegal Immigration Bounty Program:
Bring in any scalp or pair of eyes and receive $1,000. cash.
Bring in five (5) scalps in same day receive extra bonus scalp payment. Anchor Babies are paid at the full adult reward. Place remains in nearest dumpster.
A 1099 will be issued. You will need a valid SS# or you go directly to prison with a first degree murder charge...
Keith, what gives? From the data you'd think rents would remain low, but the evidence shows otherwise:
"The average apartment rent through March rose from the previous year in all 19 major Western markets surveyed by the research firm RealFacts. The increases range from less than one percent in Reno, Nevada, to more than nine percent in the San Francisco Bay area and Salt Lake City."
"Apartment rents throughout West still rising"
Associated Press, April 17, 2008
http://www.wlfi.com/Global/story.asp?S=8179664
"And what will become of vacant-home foreclosure ghost towns like Maricopa Arizona? Time to send in the bulldozers?"
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Two words: Section Eight, baby. Section Eight.
Put the gangstas and welfare queens in the middle of the desert and airlift them food and supplies every once in a while.
One of the major problems with these developments is that there are no jobs nearby -- but for the millions of people who are using Uncle Scam's safety net as a hammock, it is a dream come true.
Then the cities can be revitalized: people will actually want to live there because of the lower crime rates. This is efficient land use.
Keith, the majority of those 20 million or so vacant homes are second homes (and even third fourth and more homes of the affluent). Lots of Americans own another place on the water or in the mountains, so they are always going to have a place they own vacant at any given time. And as some others here have pointed out, the quality of newer construction is so poor that a lot of that housing stock will disappear prematurely.
Clearly it's time to repeal the stupid mortgage interest deduction scheme. Gee, who'd have thought when you SUBSIDIZE something you get MORE of it!
Also time to repeal the FED and all deficit spending politicians. They don't fight inflation they CAUSE it!
Here on Cape Cod, with foreclosures soaring and nobody buying, I think I'm just starting to see a slight sweat coming from the brow of homesellers.
I think they may even be ready now to bring down their asking prices.
It will be a long, long time before they bring them down accordingly. They still believe they are different than Miami, Phoenix and San Diego, in that, for some reason they think Cape Cod is a more attractive getaway than these places.
They still cling to Northeast snobbery, when in fact, nobody wants to buy in this congested, foul-weathered beaten housing market.
They'll learn the hard way, I guess. They'll learn that they are more at risk than these sunshine states. That they are way, way, way overpriced.
They'll also learn, someday, that this isn't a game of chicken to see who'll blink first, The potential homebuyer or the idiot homeseller. People aren't interested in buying and taking on their problems. Sorry, fool. No can do.
I just don't have the heart to tell these morons that nobody is going to buy until they sell around 30% less than they are asking now.
From the article:
2.3 mio for sale
4.1 mio for rent
4.7 mio seasonal
7.5 mio "other" i.e. in legal limbo
Total 18.6 mio empty, or 14.4 % of all homes in the US, or 1 in 7 homes.
If you deduct the seasonals, that leaves 14 mio homes available.
With annual home sales now at a pace of 5.456 mio, that's 2.5 years worth of inventory, not counting what's still under construction.
But whoever owns them still won't lower the sale price! We have 3 vacants on our block. NONE are for sale. One, the lady died 3 years ago. They periodically come and take things out. Repair when needed, but have not sold.Another, the guy died July 4 a year ago. House still has his van parked out back. The 3rd, the lady has not been seen in two years. House appears fine, no mail delivered but certainly has not been used.
Keep voting republican. You're paying $4 a gallon for gas, your cost of living is through the roof, your job is in jeopardy and your pay is stagnant.
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yep. vote democrat and watch them slap price controls on gas. then we will pay $3 a gallon when you can find it.
moron. do you really think democrats can magically lower the price of gas? They have control of congress, why don' they do something? Don't give the the "they don't have enough votes to override a veto" line because they could swing it if they wanted to. They could simply say to the repubs, override this or we will freeze up the entire process.
S&P CASE-SHILLER HOME PRICE INDEX
Change in home prices in February 2008 compared to year earlier
Atlanta -5.6%
Boston -4.6%
Charlotte 1.5%
Chicago -8.5%
Cleveland -9.2%
Dallas -4.1%
Denver -5.5%
Detroit -16.5%
Las Vegas -22.8%
Los Angeles -19.4%
Miami -21.7%
Minneapolis -12.5%
New York -6.6%
Phoenix -20.8%
Portland -2.0%
San Diego -19.2%
San Francisco -17.2%
Seattle -2.7%
Tampa -17.5%
Washington -13.0%
20-city composite -12.7%
Stupid anon,
You're not going to reverse 30 years of wealth-worshipping conservatism in a year. The damage done by the decades of republican rule will take half a century to correct.
But I urge you to keep voting republican. Go for it. I'm already getting a lot of laughs watching the ex-union grunts scramble to feed themselves and their families now that the cushy jobs are GONE, my sides begin to hurt when I picture their ignorant, miserable lives after a few more years of conservatism. Tent cities, anyone?
That's why, like Obama said, they get more bitter and ignorant by the day. Fuck the average American. Let them suffer.
"Come on, does anyone really believe there's such a thing as a 'free market' as such a statement implies ?"
'free' means lack of (armed) coercion. Of all the players in the marketplace, only the government has the power to force you to do anything. When the REIC offers slime deals I can just walk away; but now they have the government collect their money for them which gives me no choice but to pay up.
Price controls didn't work too well in Zimbabwe or Venezuela either. Now they have soaring prices as well as shortages
"after a few more years of conservatism. Tent cities, anyone?"
That's the second comment you've made about tent cities. Poor guy, you actually think the world will collapse in rapid order. Poor, young, innocent fool. Like the socialists that claim there are no more manufacturing jobs left in the country, or that all technical work will be offshored within the next 6 months so only WalJobs remain.
Your children and grandchildren will thank you for setting the bar so low. With a crummy job, no savings, and a dumpy apartment. Wait, what am I saying? Your type doesn't want to bring kids into this "evil world".
Good luck to you. Keep hoarding your water, canned food, and ammo.
bitterrenter - it is proven fact that the Repugs stole the last two Presidential elections. Many average Fox News and Rush zombies voted for Bush twice. But still, he never legitmately won any Presidential election. See Fooled Again by Mark Crispin Miller.
> does anyone really believe there's such a thing as a 'free market' as such a statement implies ?
Yes, but not for houses. There is a free market for consumer articles like computers, cars, clothes. The housing market, on the other hand, is heavily influenced by taxation, due to the wish of the government to interfere in favor of their supporters.
anon said...
But whoever owns them still won't lower the sale price! We have 3 vacants on our block. NONE are for sale. One, the lady died 3 years ago. They periodically come and take things out. Repair when needed, but have not sold.Another, the guy died July 4 a year ago. House still has his van parked out back. The 3rd, the lady has not been seen in two years. House appears fine, no mail delivered but certainly has not been used.
___________________________________
So, don't buy the house. Just move in and live there for free!
Squatting is where it's at!
Jymkata
QWEEFIE,
I kmow this may be a foreign concept for your $8 an hour McWorker readers, but here it goes....
Millions of people own second homes. Even 3rd homes. I own a ski condo that is empty or "vacant" about 300 days a year. Same goes for the millions of other ski condos, chalets, country homes, beach homes, all over the land.
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