14 million homes are vacant

by Dollars and Sense

From USA Today:

Census numbers show:

• More than 14 million housing units are vacant. That number does not include an estimated 4.8 million seasonal or vacation homes, most of which are occupied part of the year. The combined vacancy rate of almost 15% is higher than during previous recessions: 11% in 1991 and 9.4% in 1984.

• About 3% of owned homes are vacant. In normal times, "maybe 1% should be vacant," Myers says.

• More than 9% of homes built since 2000 are vacant compared with about 2% for older homes.

• Homes priced at $500,000 or more are just as likely to be empty as homes that cost less than $100,000.

Banks are on a tear to evict people rather than renegotiate loans to market rates. As we wrote earlier, this has hit renters as well as homeowners.

The Obama plan barely addresses this problem by providing just $2 billion for buying up and renovating abandoned properties -- hardly enough to make the slightest dent in the growing glut of vacant properties.

The bank policy of forcing eviction instead of renegotiating the loans to market rates is insane. The glut of foreclosed properties is driving down the value of homes everywhere. Vacant properties quickly attract vandals and criminals, often leaving disaster zones in their wake. The banks are left with a property worth a fraction of what they could have gotten by renegotiating the loans. This is why some Democrats have been pushing to give bankruptcy judges the authority to "cram down" mortgages.

The impact has been devastating for communities. Owners who keep up on their mortgages have seen their home values fall even further, vacant properties are a blight on neighborhoods, and homelessness is rising. The banks seem determined to drive themselves into the ground and take the rest of the country with them.

--d.f.

Labels: Daniel Fireside, eviction, housing bubble, housing market, mortgage meltdown, Mortgage plan

 

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4/24/2009 03:31:00 PM