Homeowner Vacancy Rate May Be Worse Than Reported
Every so often I like to discuss this odd little quarterly report from the Census called the Residential Vacancies and Homeownership report.
I want to talk about it today because I think it’s not giving us the full picture of what it purports.
The homeowner vacancy rate did rise to a record-matching level of 2.9% and the homeownership rate did fall to 67.5 percent in Q4 from 67.9 percent in Q3 2008. I’m just not sure these numbers are reflecting what’s really going on out there, especially given what I’m hearing from Realtors, housing experts, and all of you writing into the blog.
I called the Census bureau yesterday to get a better idea of how foreclosures fit into these numbers. They guided me to the “Frequently Asked Questions” on the Housing page of the site. Once clicked, I scrolled down to #6: Where are all the foreclosures in the HVS report?
Foreclosures may be in any of the housing stock categories on Table 3 (Estimates of the Total Housing Inventory for the United States) of the press release. They could still be occupied by the owner, or still be occupied by the renter, making them "owner occupied" or "renter occupied", respectively.
They could also be vacant and available for sale or for rent. If the unit is classified as "vacant for sale only", it will be included in the "vacant for sale" category. If the unit is for rent or "for sale OR rent, " it will be included in the "vacant for rent" category.
In other words, they could figure into the numbers anywhere.
I believe that despite the record number, there are far more vacant homes out there than is being reported. I believe this because when I ask lenders why they have so much trouble modifying bad loans, they often answer, because we can’t find the owner of the house.
They’ve already abandoned.
Many of you have written in to me that you are living near or next door to an abandoned home that doesn’t appear to even be in foreclosure yet. Given, as Zillow.com reported today, that homeowners have lost a collective $3.3 trillion in home equity in 2008 alone and that 1 in 6 borrowers now have negative equity in their homes, I’d like to see the current homeonwer abandonment rate.
That might be a better indicator of where we stand in the worst housing correction of all time.
Questions? Comments? RealtyCheck@cnbc.com