In the fast-paced world of the U.S. real estate market, it’s easy to become engrossed in discussing soaring prices, bidding wars, or the housing affordability crisis. Yet, an often overlooked aspect, the presence of vacant homes, demands our attention due to its significant impact on the industry. With this article, we aim to shed light on the prevalence of vacant homes in the United States and their implications for the real estate market, supported by the latest statistics, research findings, and expert insights.
According to the most recent data from the U.S. Census Bureau’s Housing Vacancies and Homeownership report, as of Q4 2022, the homeowner vacancy rate stood at 1.0%, while the rental vacancy rate was 5.9%. Although these figures may seem insignificant at first glance, when translated into actual numbers, the scenario is rather striking. The Housing Assistance Council (HAC) reported that there were approximately 17 million vacant homes in the U.S. in 2022, accounting for about 13% of all residential properties.
A significant portion of these vacant homes fall under the category of “other vacant” properties—those that are neither for sale nor for rent but are left vacant due to various reasons, including seasonal use, legal proceedings, or personal reasons. But how does such a high prevalence of vacant homes impact the real estate market?
Firstly, vacant properties can exert downward pressure on neighborhood property values. An analysis by the Brookings Institution found that in areas with high levels of long-term vacancies, property values could decrease by as much as 20%. This, in turn, can undermine the equity homeowners have in their homes and lower potential returns for real estate investors.
Secondly, vacant homes can distort the dynamics of housing supply and demand. Despite a notable housing shortage in many urban areas and the escalating costs of homes, there is a surplus of vacant homes—albeit often in locations with lower demand. As a result, the market is unable to efficiently allocate these empty homes to those in need, resulting in a spatial mismatch that contributes to the exacerbation of the affordability crisis.
Moreover, long-term vacant homes can lead to increased costs for municipalities due to the need for extra policing, fire protection, and maintenance, which could further deter potential investors. A study by the U.S. Fire Administration found that vacant residential building fires alone cost an estimated $777 million in property loss per year.
Several industry experts and research organizations are now advocating for targeted solutions to address the issue of vacant homes. The National Vacant Properties Campaign (NVPC), for instance, promotes the rehabilitation and transformation of these properties into affordable housing. Other proposed strategies include introducing stricter vacant property registration ordinances, improving local infrastructure, and advocating for better land use policies.
In conclusion, the significant number of vacant homes in the U.S. not only contributes to the complexity of our housing issues but also presents potential opportunities for real estate stakeholders to creatively address housing affordability and community revitalization. As we continue to navigate the shifting landscape of the U.S. real estate market, it’s essential to consider the multifaceted impact of vacant homes on our industry.
Sources:
1. U.S. Census Bureau. (2022). Housing Vacancies and Homeownership.
2. Housing Assistance Council. (2022). Vacant Property in the United States.
3. Brookings Institution. (2018). The Cost of Vacant Homes.
4. U.S. Fire Administration. (2019). Vacant Residential Building Fires.
5. National Vacant Properties Campaign. (2022). Strategies for Confronting the Challenge of Vacant Properties.
