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US Homes 11.5% Vacant

Tuesday, March 29th, 2011

High residential vacancies are killing many housing markets, as foreclosed homes sit on the market and depress sale prices and property values.

The national vacancy rate at 11.4% according to a release Tuesday from the Census Bureau.

“Vacant homes equal more downward pressure on home prices,” said Brad Hunter, chief economist for Metrostudy, a real estate information provider.

Maine had the highest proportion of empty housing stock, at 22.8%. Other states with gluts of empty houses included Vermont (20.5%), Florida (17.5%), Arizona (16.3%) and Alaska (15.9%).

The way the census calculates the vacancy rates, however, is problematic. It includes properties such as ski lodges, beach houses and pied-à-terres that many real estate statisticians would not.

These are often summer homes or second homes, but census lumps them together with homes that have been sold but not occupied, empty homes for sale or rent, and homes used by migrant workers. Basically, anything other than a primary residence is considered vacant.

“You can only live in one home,” said William Chapin of the Census Bureau’s Housing Statistics Branch. “If you own five homes that you occasionally live in, four of them will be counted as vacant.”

But Paul Bishop, the vice president for research for the National Association of Realtors, countered that these properties aren’t vacant in the usual sense of the term. “A vacation home is hardly the same situation as a foreclosed home that has been taken back by the bank,” he said.

In Maine, more than two-thirds of the 160,000 vacancies were vacation homes in 2009; Vermont had a similarly high concentration.

Compare them with Connecticut, which has a vacancy rate of just 7.9%, the lowest of all the states. If you back out the vacation properties from the statistics, the states have very similar vacancy rates: 6.1% for Connecticut and 7% for Maine.

Some states have high vacancy rates even after backing out the second homes: Florida’s is about 10%; Arizona’s is 10.7%; and Nevada’s 11.4%.

Besides Connecticut, the other states with lowest vacancy rates are California, Iowa, Illinois, Virginia and Washington, all at 9.2% or lower.\

Source: CNN

 

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Housing Market Worse Than During Great Depression

Monday, January 17th, 2011

Home prices fell for the 53rd straight month in November, taking the decline past that of the Great Depression for the first time in the prolonged housing slump, according to Zillow.com.

Prices have fallen 26 percent since their peak in 2006, exceeding the 25.9 percent drop registered in the five years between 1928 and 1933, the housing data company reports.

The word comes on the heels of figures showing banks repossessed more than one million homes in the U.S. last year — and they’re expected to take back even more this year.

On “The Early Show” Thursday, Jason Cochran, Editor-at-Large at AOL’s WalletPop.com, discuss what it all means for buyers, sellers, mortgage-seekers, people mulling refinancing or doing home improvements, and others:

He says this is, as you might expect, a great time to buy. Foreclosures and short sales made up a significant portion of homes sold in last year’s latter stages. Foreclosed houses sell on average for almost a-third less than non-foreclosures. January is a particularly good time for buyers, especially in Northeast. Sales slow to a crawl, so buyers are in a good position.

Cochran adds that sellers obviously remain on the other side of the housing coin.

So many foreclosures on the market stiffen competition, but those can take a while to close, so if your house isn’t in foreclosure, you may attract buyers who need a place right away. Home buying tax credits expired, taking some wind out of the sails. You may also be more likely to attract cash buyers since the mortgage process is so painful right now.

Advice: MAKE YOUR HOME STAND OUT. You’re competing against bargain-bin houses! You must be proactive in making sure yours is up-to-date with repairs.

Some sellers are going through real estate agents to pitch people who looked at the house but didn’t bid — it’s called a “reverse offer” — and it’s happening more and more. Others are tossing in extra inducements: “Get a free flat-screen TV if you buy my house!” “I’ll pay your closing costs,” etc. One Connecticut couple is throwing in their Florida townhouse in with the sale of their $615,000 house!

Source: CBS News

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New Wave Of Foreclosures Threatens Real Estate Market

Friday, March 12th, 2010

Image: Foreclosed home

The housing market is facing swelling ranks of homeowners who are seriously delinquent but have yet to lose their homes, and this is threatening a new wave of foreclosures that could hit just as the real estate market has begun to stabilize.

About 5 million to 7 million properties are potentially eligible for foreclosure but have not yet been repossessed and put up for sale. Some economists project it could take nearly three years before all these homes have been put on the market and purchased by new owners.

And the number of pending foreclosures could grow much bigger over the coming year as more distressed borrowers become delinquent and then, if they can’t obtain mortgage relief, wade through the foreclosure process, which often takes more than a year to complete.

As these foreclosed properties add to the supply of homes for sale, they could undercut housing prices, which have increased modestly through December, according to the most recent figures in the S&P/Case-Shiller home prices index. That rise partly reflected a slowdown in the flow of foreclosed homes onto the market.

The rate at which J.P. Morgan Chase seized properties, for example, peaked in the middle of 2008 and fell steadily last year, according to a February investor report. But the bank expects repossessions to increase this year, nearly doubling to 45,000 by the fourth quarter.

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14% of US Homes in Foreclosure

Wednesday, January 20th, 2010

A record one in seven U.S. mortgages were in foreclosure or at least one payment past due in the third quarter, according to fresh data signaling the recovery in the housing market will be tepid at best.

U.S. mortgage delinquency rates and the percentage of loans that entered the foreclosure process also jumped to records from July to September, the Mortgage Bankers Association said on Thursday.

Rising job losses were behind the increasingly bleak portrait of the housing market in a trend that will continue into next year, the group said in data that adds to recent evidence of a still-struggling housing market.

Housing and related business account for about 20 percent of the economy and recovery is essential to bring unemployment down from a 26-1/2-year high and kick-start economic growth.

Yet record foreclosures will add to the growing supply of unsold homes, sapping the housing market as it attempts to recover from the worst slump since the Great Depression.

The MBA said the percentage of loans in foreclosure rose to 1.42 percent, from 1.36 percent in the second quarter and 1.07 percent in the third quarter of 2008.

“Foreclosures remain the biggest hurdle to the housing recovery,” said Michelle Meyer, economist at Barclays Capital in New York.

Source (Reuters)

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