Tags: home | vacancy | rate

Record 19 Million Empty Homes

By Greg Brown   |   Wednesday, 04 Feb 2009 09:52 AM

The number of empty homes — for sale or rent — has hit a record 19 million, the U.S. Census Bureau reports.

As foreclosures mount and banks seize properties, the number of them sitting empty rose by 6.7 percent from the fourth quarter of 2007. The number of homes for sale rose to 2.9 percent of all homes, the highest since the agency began tracking data in 1956.

Home ownership, meanwhile, has fallen to 67.5 percent, a low not seen since the housing boom began in early 2001.

All this has prompted politicians to recast the stimulus bill working its way through Congress as a home rescue bill as much as a jobs bill. Republicans in the Senate want tax breaks for buyers and up to $300 billion in new mortgage subsidies, while Democrats seek to rewrite existing contracts and provide up to $100 billion in direct aid to stop foreclosures.

“Most people recognize that housing itself is at the root of the current economic downturn,” Senate Republican Leader Mitch McConnell told The New York Times.

“We should fix this problem before we fix anything else.”

It could get worse before Congress can act.

Already, one in five home sales were due to a foreclosure in 2008, according to real estate Web site Zillow. Another 11 percent were short sales, where the bank voluntarily gives up principal in order to move the property to a buyer.

Up to one-third of borrowers who see a decline of 20 percent or more will eventually abandon their homes, predicts real estate expert Norm Miller at the University of San Diego.

We're already there. The latest S&P/Case-Shiller housing price index shows prices fell 18.2 percent in the year ending in November, the latest report available. The 10-city index declined 19.1 percent.

"When you're underwater and prices continue to fall, you tend to walk," Miller told Bloomberg News.

"It's a downward spiral that's tough to stop because it feeds on itself. Foreclosures encourage other foreclosures and falling prices discourage buying."

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The number of empty homes — for sale or rent — has hit a record 19 million, the U.S. Census Bureau reports.As foreclosures mount and banks seize properties, the number of them sitting empty rose by 6.7 percent from the fourth quarter of 2007. The number of homes for sale...
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2009-52-04
 

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