Vacancies & The Housing Recovery

Couple of things from this report:
`The homeownership rate increased from around 64 percent in the middle of the 1990′s to more than 69 percent in the middle of the 2000′s. This increase in the homeownership rate represented an increase of more than 11 million owner-oocupied housing units across the country.

`Shadow Inventory appears to be under 2,000,000 housing units, probably closer to 1.6 million units

`According to HVS, the total housing stock in the United States is 132,353,00

~Homeowner vacancy rate is to be considered normal at 2.0%. The homeowner vacancy rate in Q3 2011 was 2.42%.

~Using the assumptions outlined in this report, the results imply that the homeowner vacancy rate will not mormalize to 2.0 percent until 41 quarters have passed, or until Q4 2021.

~From 1995 to 2003, according to the U.S. Department of Housing and Urban Development, homes lost through demolition or disaster averaged roughly 380,000 per year. Since 2007, the destruction rate has picked up to an average of around 560,000 units destroyed per year.

~With so many vacant homes hanging over the market, prices will remain subdued, which will tend to keep appraisals and mortgage underwriting on the conservative side. In some ways, the renewed vigilance on valuations and credit approvals is the exact opposite of what was seen a decade ago, when valuations became unduly inflated and credit flowed much too easily. The net result is also, in many ways, THE POLAR OPPOSITE OF WHAT WAS SEEN THEN.

~Housing Turnover Rate averaged around 3.4 percent from 1970 to 2000.

Source: Wells Fargo Securities