RealtyTrac: Property Vacancy Rate Drops 9.3%

RealtyTrac, Irvine, Calif., reported a 9.3 percent drop in vacant residential properties since the third quarter, which could cause upward pressure on home prices and rents.

The company’s Q1 2016 U.S. Residential Property Vacancy Analysis reported 1.3 million vacant residential properties (one to four units) out of nearly 85 million residential properties nationwide, totaling 1.6 percent, at the beginning of February, down 9.3 percent from the third quarter.

“The challenge facing most U.S. real estate markets is not too many vacant homes but too few,” said Daren Blomquist, vice president with RealtyTrac. “The razor-thin vacancy rates in many markets are placing upward pressure on home prices and rents. While that may be good news for sellers and landlords, it is bad news for buyers and renters and could be bad news for all if prices and rents are inflated above tolerable affordability thresholds.”

The report said among 147 metropolitan statistical areas with at least 100,000 residential properties, those with the highest share of vacant properties were Flint, Mich. (7.5 percent), Detroit (5.3 percent), Youngstown, Ohio (4.4 percent), Beaumont-Port Arthur, Texas (3.8 percent) and Atlantic City, N.J. (3.7 percent). Other major metro areas with vacancy rates above the national average included Indianapolis (3.0 percent), Tampa (2.9 percent), Miami (2.8 percent), Cleveland (2.8 percent) and St. Louis (2.6 percent).

Metro areas with the lowest share of vacant properties were San Jose, Calif. (0.2 percent), Fort Collins, Colo. (0.2 percent), Manchester, N.H. (0.3 percent), Provo, Utah (0.3 percent), Lancaster, Pa. (0.3 percent), and San Francisco (0.3 percent). Other major metro areas with vacancy rates below the national average included Los Angeles (0.4 percent), Boston (0.5 percent), Denver (0.5 percent) and Washington, D.C. (0.5 percent).

RealtyTrac said investment properties accounted for 76.7 percent (1.045 million) of all vacant properties nationwide. Among metro areas with at least 100,000 residential properties, those where investment properties accounted for the highest share of vacant homes were Myrtle Beach, S.C. (95.0 percent), Barnstable, Mass. (93.5 percent), Salisbury, Md. (91.9 percent), Lexington, Key. (91.8 percent) and Asheville, N.C. (90.6 percent).

The report also found that investment properties are more likely to be vacant (4.3 percent vacancy rate nationwide), but investment property vacancy rates are 3 percent or below in more than one-third of U.S. markets, which Blomquist said was good news for landlords but bad news for renters in those markets.

Among metro areas with at least 100,000 residential properties, those with that highest share of vacant investment properties were Flint, Mich. (23.1 percent), Detroit (15.1 percent), Youngstown, Ohio (11.4 percent), South Bend, Ind. (10.9 percent) and Indianapolis (10.8 percent). Metro areas with the lowest share of vacant investment properties were Fort Collins, Colo. (0.6 percent), San Jose, Calif. (0.7 percent), Fayetteville, Ark. (0.8 percent), Provo, Utah (0.9 percent) and San Francisco (0.9 percent).

RealtyTrac said properties in the foreclosure process accounted for 1.5 percent (19,793) of all vacant properties nationwide, but the number of these “zombie” foreclosures was down 4 percent from a year ago, when there were 20,575 nationwide.

States with the biggest increase in zombie foreclosures from a year ago included Massachusetts (up 167 percent), Oklahoma (up 89 percent), Michigan (up 71 percent), Arizona (up 52 percent) and New Jersey (up 49 percent).

Metro areas with the biggest increase in zombie foreclosures from a year ago included Worcester, Massachusetts (up 163 percent), Providence, Rhode Island (up 148 percent), Boston (up 111 percent), St. Louis (up 108 percent) and Detroit (up 71 percent).