The height of the foreclosure crisis has come and gone, but more than 1.3 million ( or 1.6 percent) of U.S. residential properties were vacant at the beginning of February 2016, according to an updated analysis from RealtyTrac.
That’s down 9.3 percent from the last residential-property vacancy review in the third quarter of 2015.
There is a “good news/bad news” scenario at play. While fewer abandoned or empty properties is a result of fewer foreclosures and bank-owned properties on the market, it also means that low vacancy rates in many markets are fueling higher prices, keeping prospective buyers at bay or out of the market completely.
The analysis used RealtyTrac’s publicly recorded real estate data — including foreclosure status (zombie foreclosures), owner-occupancy status, and equity — matched against monthly updated vacancy data from the U.S. Postal Service.
“With several notable exceptions, the challenge facing most U.S. real estate markets is not too many vacant homes but too few,” said Daren Blomquist, vice president at RealtyTrac. “The razor-thin vacancy rates in many markets are placing upward pressure on home prices and rents. While that may be good news for sellers and landlords, it is bad news for buyers and renters and could be bad news for all if prices and rents are inflated above tolerable affordability thresholds.”
Among 147 metropolitan statistical areas with at least 100,000 residential properties, those with the highest share of vacant properties were Flint, Michigan (7.5 percent), Detroit (5.3 percent), Youngstown, Ohio (4.4 percent), Beaumont-Port Arthur, Texas (3.8 percent), and Atlantic City, New Jersey (3.7 percent). Other major metro areas with vacancy rates above the national average included Indianapolis (3.0 percent), Tampa (2.9 percent), Miami (2.8 percent), Cleveland (2.8 percent), and St. Louis (2.6 percent).
“Across the Ohio markets, occupancy demand is fueling a robust seller’s market for residential and commercial real estate,” said Michael Mahon, president at HER Realtors, covering the Ohio markets of Dayton, Columbus and Cincinnati. “With vacancy rates low, situations such as leasebacks and delayed occupancy are factors of concern in trying to get timing aligned for possession transfer in many communities. Couple this demand with the added necessary timing factors of the new Federal TRID disclosure process for 2016, and there is an even more heightened need for clear and consistent communication between buyers and sellers involving the timing and expectations of possession transfer regarding real estate transactions.”
Metro areas with the lowest share of vacant properties were San Jose, California (0.2 percent), Fort Collins, Colorado (0.2 percent), Manchester, New Hampshire (0.3 percent), Provo, Utah (0.3 percent), Lancaster, Pennsylvania (0.3 percent), and San Francisco (0.3 percent).