I’ve tracked the housing vacancy rate for homes actively on the market in the Charlottesville MSA irregularly over the past several years; it’s an indicator as to the health of the housing market. More occupied homes = a healthier market.
The last time I checked, the percent of homes on the market in the Charlottesville MLS that showed as being “vacant” in the showing instructions was about 22%. In 2008, that percentage was about 33%. In 2007, that percentage was 36%!
Right now, there are:
- 2271 residential properties marked as “active” in the MLS
- 525 of them are marked as “vacant”
- Simple math says that 23% of the active inventory is vacant.
I’ll take this decreasing vacancy rate as a very good sign for the Charlottesville economy. Here’s why:
- Fewer vacant homes means fewer deteriorating properties, theoretically fewer distressed homeowners as there are fewer people making two house payments, often pulling from savings, staving off what may be the inevitable end result ….
- Fewer vacant homes means there’s less of a psychological drag on the market.
- More of these vacant homes are being rented … those renters may one day be homeowners.
- Fewer vacant homes means the Charlottesville real estate market’s starting to recover.
But … (and this is where my conflicted mind starts to implode)
- What about the shadow inventory? What happens when prices start to rise (and in some parts of our market prices are rising) … and banks start releasing the massive inventory they are currently holding to the market?
- What if 90% of those homes that used to be vacant are now part of the rental inventory and not the resale inventory? (not that that’s a bad thing)