The Census Bureau figures tell us that there are lots of vacant home off market.
As of the First Quarter of 2012, there are approximately 4,053,000 of these according to the Census Bureau. That compares to 1,653,000 vacant housing units that are on the market for sale. The 4 million figure represents 3.1% of our housing stock. In the Northeast, that figure is lower @ 2.7% of housing stock. I was only able to find data for the Boston Metropolitan Area for 2010 which is data that is too old for our purpose here.
I am assuming that many of those homes held off market “for other reasons” are homes that will end up on the housing market.
The Boston area residential real estate market has been better than it has been in years without direct government stimulus. I don’t think it will last. Radar Logic Research’s March monthly market report does a good job summing it up.
- Radar Logic summarizes the issue as oversupply. I see it as there are many more REO’s heading to market. REO’s drive prices down. Some of the activity occuring right now is due to pent up demand. The pent up demand might not last.
- Interest rates will not stay this low indefinitely. We have the European financial crisis to thank for our extremely low interest rates. Interest rates and residential housing prices move in opposite directions.
Do you think this housing market strength signals a long term turn around?
The shadow foreclosure inventory that has existed in Massachusetts is moving onto the market.
Massachusetts Petitions & Deeds March 2012
Investors should be wondering how much the REO properties will affect real estate values and when the bulk of the inventory will hit the market. We have been seeing signs of lenders moving the inventory to market over the past months after the settlement between the large lenders and our government. The size of the shadow inventory has been declining due to HAMP and an improving economy but the increase in REO properties on the market should still affect prices.
See a graph on the Massachusetts Housing Partnership website to find out how the current wave of foreclosures compare to the prior wave.
Investors and landlords of multifamily income properties benefit when their renters take out renters insurance. The renters insurance policies are meant to take care of the renter’s interests but landlords benefit too. Take a look at what one policy writer, Liberty Mutual, offers to renters.
I recommend that investors introduce their renters to the idea of renters insurance. Some landlords go as far as requiring renters to get renters insurance. Rich Vetstein talks about the legality of the requirement.