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A Staggering 18.9 Million Homes in U.S. Are Currently Vacant

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Foreclosures rise

Shadow Inventory of REOsAs the number of foreclosure filings hit historic highs, studies and statistics show staggering results. Of the 130.6 Million housing units in America, 18.9 Million homes are vacant as of the end of December 2009, according to the U.S. Census Bureau. That’s more than the entire population of Greece and Israel combined!

The Census Bureau also reported that national vacancy rates in the fourth quarter 2009 were 10.7% for rental housing and 2.7% for homeowner housing and that the vacancy rate for rentals was higher than the fourth quarter 2008 rate of 10% but just barely (at 1%).

Some economists predict that we haven’t hit bottom yet and predict more homes will be lost despite the Obama Administration’s attempts (through what some call a failing program known as HAMP) to help sinking homeowners. Others forecast that we are currently bouncing at the bottom and that 2010 is the year of recovery. What say you?

Lani is the Chief Operating Officer at The American Genius - she has co-authored a book, co-founded BASHH and Austin Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

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17 Comments

17 Comments

  1. Mike

    February 3, 2010 at 6:42 am

    As an agent that has listed a decent amount of REO’s, this is one of my biggest complaints, of many, that the banks and servicers are making. During the many moratoriums and delays in the actual foreclosure of the properties, the banks should have been sending the eventual listing agent or property preservation rep out to the property to check occupancy. If the property is vacant, GET IT ON THE MARKET already! For those that think that a shadow inventory does not exist, I can assure you that it does. I have an upscale property that has been under contract for 2 months as we work out the plumbing issues due to the property being vacated prior to the winter of 2008. It was not FC on untill September of 2009. Another duplex that I have now, was vacated sometime prior to April of 2009. It was FC on in late december. Only about 30% of my FCs have been occupied. The longer they are vacant, the more problems that occur. Once the electric is off, the sump pump doesn’t work, and bad things can happen. The longer it sits, the more taxes and HOA dues that will need to be paid. The banks are not handling any of this well.

  2. Anne Lackey

    February 3, 2010 at 7:57 am

    I think we still have a way to go. Rental vacancies are very high, rental rates are being depressed, investors who can’t loan mod/refinance or fill their vacancies are being added to the foreclosure mix. I think 2010 will be another challenging year.

    However, I do think the housing prices have fallen about as low as they will go. I just believe that there will be more of them. I certainly believe that the shadow inventory exists as I watch the number of foreclosures as well as what is being dripped into the market. Huge difference in the numbers. Those houses are somewhere… Great post!

  3. BawldGuy

    February 3, 2010 at 8:04 am

    The bottom? Depends upon what region. Using the macro outlook though, we’re two rest stops and a dinner away from Grandma’s house. Meaning? 2010 will be OK to better than OK. From then on the odoriferous matter will hit the spinning steel blades. Many more homes will be lost.

    The degree to which things will get better or worse, sooner or later, depends entirely on the ideological base on which the country’s leadership acts. If we keep careening down the same unlit, pothole strewn road, the light at the tunnel could very well be a freight train coming our way.

  4. Brad Officer - Jacksonville Short Sales

    February 3, 2010 at 8:23 am

    My opinion: We are not at the bottom

    The amount of homeowners attempting to get a MOD through the HAMP program is staggering. Add the failure % for the modification and you have a massive amount of homeowners who are close to just walking away. Compile the HAMP failure factor with the amount of job losses or drops in income and I believe we are still on the way down.

  5. Joe Loomer

    February 3, 2010 at 9:58 am

    half agree with Bawld Guy – 2010 may end up statistically OK – but I think it will only be because of a warm start due to the Tax Credit extension/expansion. But it all is indeed macro-level to the REALTOR boots on the ground…

    Post-April should be on par or below 2009 numbers. FHA tightening and unemployment seem to be portents of a bleak third and fourth quarter. At least locally – barring a major industry or other commercial venture deciding on our area.

    Navy Chief, Navy Pride

  6. BawldGuy

    February 3, 2010 at 10:04 am

    Hey Joe — You could be spot on. I was speaking in more or less ‘net’ terms.

    One factor which hasn’t been discussed much, if at all, is the market’s anticipation of the automatic tax increase coming on New Year’s Day 2011. Together with all the other drags on the economy, that one alone could be the final straw. There’s nothing like guaranteed tax hikes to influence human financial behavior before the fact.

  7. andreslucero

    February 3, 2010 at 11:33 am

    As a complete outsider to the real estate industry, anecdotal evidence suggests that things will get worse before they get better.

    NPR’s Planet Money podcast recently had an interesting episode about strategic defaults—people who are walking away from their undervalued homes, even when they can afford to pay the mortgage. When this type of behavior makes economic sense, the country is definitely still in trouble.

    npr.org/blogs/money/2010/01/podcast_to_walk_away_or_stay.html

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Austin

Austin tops the list of best places to buy a home

When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?

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Looking at the bigger picture

(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).

That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).

They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.

“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”

Click here to continue reading the list of the 12 best places to buy a home…

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Housing News

Average age of houses on the rise, so is it now better or worse to buy new?

With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.

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aging housing inventory

The average home age is higher than ever

(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.

With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.

Prices of new homes on the rise

Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.

Click here to continue reading this story…

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Housing News

Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?

The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.

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zillow move

Why Realtors are vulnerable to these rapid changes

(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.

Note: We’ll let you decide which company plays which role in the image above.

So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.

1. Zillow poaches top talent, Move/NAR sues

It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.

Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.

2. Two major media brands emerge

Last fall, the News Corp. acquisition of Move, Inc. was given the green light by the feds, and this month, Zillow finalized their acquisition of Trulia.

…Click here to continue reading this story…

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