Rising Vacancy Rates for Homes for Rent in Many Cities
Vacancy rates for both homes for rent and homes for sale have been increasing in many cities in the country, according to a study made by forbes.com.
Forbes.com studied Census Bureau homeowner and rental vacancy rates in the nation’s 75 biggest metro areas in the first quarter and ranked these areas based on their average increase in both homeowner and rental vacancy rates compared to the same period in 2008.
Kansas City ranked first on forbes.com’s list of abandoned cities. The rental housing vacancy rate increased from 11.9 percent to 15 percent while property owner vacancy rate almost doubled, jumping to 3.8 percent from the previous rate of 2.1 percent.
In contrast, the average property owner vacancy rate for the 75 metro areas studied slightly improved from 3 percent to 2.7 percent. The rental housing vacancy rate also rose from 10 percent to 10.2 percent.
Analysts said that if homeowner vacancy rates and rental vacancy rates are increasing together, it means that there is an overbuilding of homes or there is a decline in population.
Other metro areas posted increases in both rental housing vacancy rates and homeowner vacancy rates. The Oakland and San Francisco metro area, the second in the list, had increased vacancy rates because people were leaving high-cost Bay Area for more affordable cities. The rental housing vacancy rate soared from 4.7 percent last year to 7.1 percent this year. Homeowner vacancies rose by more than three times from 1.1 percent last year to 3.4 percent this year.
High vacancy rates in the third metro area in the list, Tucson, were the result of overbuilding of homes during the boom.
Many of the metro areas on the vacancy list are struggling from the effects of the boom. Miami, eighth in the list, increased its rental vacancy rate from 11.4 percent last year to 12.7 percent this year. Miami is battered with empty high-rise residential towers completed just before the housing market collapsed.
The homeowner vacancy rate increased more sharply, from 3.8 percent to 5.6 percent due largely to foreclosures.
According to a Florida foreclosure survey, 40 percent of all vacant homes in the Miami metro area are foreclosures.
Nicolas Retsinas, head of the Harvard University Joint Center for Housing Studies, said vacancy rates result from both supply and demand factors. Overbuilding causes supply problems while the troubled economy, particularly unemployment, causes demand problems.
