Vacancy Rates Are ‘High’ and Favorable for Some Southern Markets
Vacancy rates are plunging in many housing markets across America.
Approximately 1.6 percent of the 85 million residential properties were vacant at the beginning of February 2016, according to a recent report from RealtyTrac’s U.S. Residential Vacancy Analysis. This was a 9.3 percent drop from the previous vacancy analysis in the third quarter of 2015.
The findings shed light on a new challenge in most U.S. real estate markets that there are “not too many vacant homes but too few,” says Daren Blomquist, vice president of RealtyTrac, in a statement.
While markets like Seattle, San Francisco, and Boston had vacancy rates that were below the average rate of 1.6 percent, other markets like Detroit, Beaumont, TX, and Atlantic City, NJ, saw higher-than-average vacancy rates.
Birmingham-Hoover, AL. Vacancy rate: 3.2 percent (Rob Hainer/Shutterstock.com)
Montgomery, AL. Vacancy rate: 3.3 percent (LMspencer/Shutterstock.com)
Port St. Lucie, FL. Vacancy rate: 3.5 percent (Shutterstock.com)
Mobile, AL. Vacancy rate: 3.7 percent (Shutterstock.com)
Beaumont-Port Arthur, TX. Vacancy rate: 3.8 percent (Nicolas Henderson/Flickr)
There were also many markets in the South, particularly in Alabama and Florida, that still have high vacancy rates. Despite these high numbers, there is plenty of optimism and change happening in these markets that will help bring vacancy rates down, says Mercedes Henriksson, an REO sales director for Fannie Mae.
“The situation we had years ago in 2008 where people were just leaving these properties and moving on to something else because they couldn’t take care of them—we’re in a completely different place right now,” says Henriksson.
For instance, the number of “zombie” properties—foreclosed homes that may be in the default process but have not been taken over by a lender—across the country dropped 43 percent from a year ago, according to RealtyTrac. Florida, which was once hard hit by its own “zombie” foreclosure problems, is now enjoying a far smaller number of zombie properties in its marketplace.
“Due to our strong second home and international buyer market, we do have a large number of properties that are not always occupied but are well maintained,” says Mike Pappas, CEO and president of the Keyes Company, in an interview with RealtyTrac.
Having these “zombie” properties off the market is also helping with the cosmetic appearance of many neighborhoods.
“Overall, neighborhoods have gotten huge lifts in regards to painting and landscaping. It’s evident just by traveling through the various neighborhoods,” says Henriksson.
Improving job markets and redevelopment of downtown areas in markets like St. Petersburg, Fort Lauderdale, and Miami may help lure in younger homeowners, adds Henriksson, which will be one of the many factors that will play in Florida’s favor. These young homebuyers could be ideal prospects to purchase former foreclosures such as those listed on Fannie Mae’s HomePath®.com website.
HomePath.com offers owner occupants (homebuyers who will live in the home as their primary residence) an exclusive “first look” at newly listed foreclosed properties. During the First Look™ marketing period, you can make an offer and purchase a HomePath.com home without competition from investors.
“You are always going to have a large amount of vacant properties in an area such as Florida where there is a lot of vacation homes,” says Henriksson. “But we will continually see the vacancy rates get better, and it has already seen significant improvement.”