With so many foreclosure houses sitting around empty these days, housing markets across the country are faltering as property values and sales prices continue to drop. But are the 13% of US homes now vacant misleading us into a false sense of insecurity?
And with the national vacancy rate supposedly creeping up to 13%, according to the decennial census report last week, you would be mistaken for thinking things are only going to get worse.
The problem is, “vacant homes equals downward pressure on prices” claims the Metrostudy chief economist Brad Hunter. The state with the most vacancies is Maine, with almost a quarter (22.8%) of its homes empty, followed by Vermont, where a fifth (20.5%) of all housing stands empty.
However, these figures may be deceptive, given the way vacancy rates are calculated in the census. Properties such as beach houses, ski lodges and pied-a-terres are all included in the count, whereas many realtors probably wouldn’t count them. Most of these are actually second homes or summer holiday homes, but are nevertheless included in the data.
“People can only live in one property”, William Chapin of the Census Bureau says. “If you have five homes but spend the majority of the time living in just one, the other four are counted as vacant”.
Some people aren’t happy with their inclusion though. Paul Bishop of the National Association for Realtors argues that they aren’t vacant according to how the average person interprets a vacant home. He says “Vacation homes are hardly the same as foreclosed homes that have been claimed by the banks”.
The figures without vacation homes are wildly different. In Maine, which has 160,000 vacant properties, two thirds of these are said to be vacation homes. Vermont is in a similar situation. Compare these figures with those of the state with the lowest rate of vacancies, Connecticut, where 7.95 of homes are officially vacant. Take out the second homes and Connecticut's rate drops to just 6.1%, with Maine at 7%. Suddenly the difference isn’t so big anymore.