Tuesday, May 1, 2007

Housing vacancies hit rental market

Housing vacancies hit record high
With home sales diving, empty houses with for sale signs out front are becoming part of the landscape.
And the upsurge in foreclosures and forced sales are also dumping inventory on the market. Foreclosures are up 47 percent year-over-year, according to online foreclosure marketer, RealtyTrac.
In a related story, rental vacancies have also climbed, to 10.1 percent during the first quarter, from 9.5 percent a year ago. Larson thinks that investors, again, contributed much to that increase.

"A lot of speculative buys are coming onto the rental markets," he says. "The investors can't sell the properties and they're looking to offset some of their expenses by renting them out."
I stated in an earlier post my projection of how a record number of properties hitting the market would affect the rental market. It seems I am not far from the mark as I judged from this report in CNN money .
You can tell a lot about your market from perusing your local MLS and looking for listing photos showing empty units. Californians can ignore that bit of info as real estate brokers there now stage properties to look occupied, but for now it is still a useful tool for most other areas in the U.S.

An empty unit says ‘flipper’ to me, a speculator who held on too long and is now carrying the cost of an empty unit. You can bet it is only a matter of time before they pull the trigger and dump the property for what ever the market will bring or rent it out.
Which ever result, downward pressure looms in both the rental and for sale markets.
Vern

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