Low Inventories Conceal Hidden Vacancies, Threat Looms Nonetheless

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A lot of inventory is being held of the housing market for numerous reasons. Some are being held off because they need repairing and a lot of them are just sandbagging them to not have to show a huge loss at this time when they sell. For a more detailed look at this subject – please read the article below.

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While headlines continue to portray a housing market with rising prices and tight inventory, the Census Bureau released its Housing Vacancies and Homeownership report this week.

Government data reveal a dark cloud looming behind the bright headlines. Vacancies remain high, and according to Trulia, more than three-fourths of the nation’s largest markets are dealing with bigger shares of vacant homes than they saw prior to the latest housing bubble.

With inventory levels retracting even further — falling 3.3 percent year-over-year in the third quarter, according to Realtor.com — it may seem counterintuitive that vacancies would be high. However, according to the Census Bureau, about 53.5 percent of vacant homes are currently being held off the market.

The vacancy rate today is 10.2 percent, according to Census data, down from a peak of 11 percent in 2010 but stubbornly higher than the pre-bubble 8.8 percent.

Furthermore, the high vacancy rate is widespread. Trulia pointed out in a blog post Wednesday that vacancies exceed pre-bubble levels in 86 of the largest 100 metros in the country.

Some homes are being held off the market temporarily for repairs before being listed for sale or rent. However, Trulia warns that when these homes hit the market, demand may not rise to match the new inventory.

“Household formation was alarmingly slow,” said Trulia’s chief economist, Jed Kolko in a statement Tuesday responding to the newly released Census data. Household formation totaled about 380,000 year-to-date in the third quarter, notably lower than the historical annual norm of about 1.1 million.

To read the complete article – please use the link below.

Hidden Vacancies

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