The Empty Home Syndrome

The WSJ highlights a controversial data point about the U.S. residential real estate market. It turns out that the that percentage of vacant homes for sale in the U.S. is at its highest level in four decades, with the national home vacancy rate currently at 2.7%, up from 2.0% a year ago.

What does that mean? Good question.

One way to look at it is that, on average, if you wander around your neighborhood and knock on a random sample of 37 homes one of them is likely to be empty …all the time. (You would have had to knock on 50 doors last year to get the same effect.) Another, and somewhat more serious way of looking at it, is that vacancies create a kind of pressure-cooker, with people increasingly eager to do something, anything to get a sale given that their home is otherwise sitting empty.

There are, of course, lots of reasons to be nervous about this sort of figure. For example, while it’s supposed to miss vacation homes and second homes and the like, this is government data after all — there are going to be many errors. Further, unless I’m missing something, this measure mixes new and existing homes, with it much more likely that spec builders have oodles of unsold inventory than that your average homeowner has pulled up stakes and left their home empty down the street.

Nevertheless, interesting stuff, and an oft-overlooked statistic to keep in mind.


  1. Concentration of wealth can have a vicious effect on the housing market: you can see luxury markets such as London townhouses rising very fast (rich foreigners) while the rest of the areas around it is suffering a severe recession.
    The averages do not tell you much on what is going on.
    Ciao, Nassim

  2. This guy owns I think eight of those empty homes.
    Prepare to be amazed.

  3. There are in fact plenty of homes for sale by owner in the Lowcountry of SC and in the Savannah area in GA. There are also a lot of homes being offered by agencies.
    Not sure how many are from slow investment sales or just the time of the year.
    People shouldn’t panic though. Price increases have slowed, but are stable.