Monday, February 13, 2012

Vacancies in For-sale Housing: Down in 2011

According to the Housing Vacancy Survey for the fourth quarter of 2011, released on January 31 by the Census Bureau, the vacancy rate in for-sale housing in Colorado fell year over year to 1.8 percent from 2010's fourth-quarter rate of 2.2 percent. The vacancy rate in for-sale housing in the Denver-Aurora area also fell yeear over year, dropping to 1.0 percent from 2010's fourth-quarter rate of 2.1 percent.

Nationanlly, the vacancy rate was slightly higher, and was 2.3 percent during the fourth quarter of 2011. That's down from 2010's fourth quarter rate of 2.7 percent.

The vacancy rate in for-sale residences is difficult to measure and is based on information collected from homeowners. If the homeowners report that the unit has been recently vacant or will be vacant in the near future, the unit will be counted as vacancy if other conditions are met as well. The units included must not be rental units.

The graph shows that vacancies in for-sale units have been declining since 2007 nationally, and in Colorado and the Denver-Aurora area. The Denver-Aurora vacancy rate during the first quarter was at the lowest rate measured during the first quarter in more than seven years. 

The data suggests that as home sales activity has declined, the vacancy rate in these properties has declined as a result of declining turnover. Large numbers of foreclosures might suggest a rising vacancy rate in these properties, but as the HVS Q and A page notes, many foreclosing properties may not show up as vacant "for sale" properties.

The Denver-Aurora vacancy rate has been below the national rate since 2010, and this falling vacancy rate in the Denver area relative to the the nationwide vacancy rate may reflect declining foreclosure totals in Colorado as well as ongoing demand due to relatively strong household formation.