Vacancy Rates Are Higher than Average in Some Southern Markets
By D.E. Rosen | April 21, 2016
Vacancy rates are plunging in many housing markets across America.
Approximately 1.6 percent of the 85 million residential properties nationwide 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. There are "not too many vacant homes, but too few," says Daren Blomquist, vice president of RealtyTrac.
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.
There were also many markets in the South – particularly in Alabama and Florida – that still had high vacancy rates. But there is plenty happening in these markets that will help bring vacancy rates down, says Mercedes Henriksson, an REO sales director for Fannie Mae.
"In 2008, people were just leaving these properties and moving on to something else because they couldn't take care of them," says Henriksson. "We're in a completely different place right now."
For instance, the number of "zombie" properties – homes in the foreclosure process that have not been taken over by a lender – dropped 4 percent from a year earlier nationwide, according to RealtyTrac. Florida, which was hard-hit by problematic "zombie" foreclosures, now has far fewer of the properties.
"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," Mike Pappas, CEO and president of the Keyes Company, told RealtyTrac.
Among other things, getting these "zombie" properties off the market is 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 Florida markets like St. Petersburg, Ft. Lauderdale, and Miami may help lure younger homeowners, adds Henriksson. That should be one of the many factors playing in the state'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® 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, these prospective buyers can make an offer and purchase a HomePath 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 are a lot of vacation homes," says Henriksson. "But we will continually see the vacancy rates get better. Florida has already seen significant improvement."