America's big, fat housing inventory

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Submitted by hipmatt on October 31, 2007 - 5:22pm

http://www.msnbc.msn.com/id/21548791/

Houston, you have a problem — with housing inventory. And as the number of homes for sale in the country continues to creep upward thanks to waning demand, many other major U.S. cities are dealing with the same issue.

At the current existing-home sales rate of 5.04 million units a year, it would take a full 10.5 months to sell the 4.4 million existing homes now on the market, according to data released by the National Association of Realtors (NAR) on Oct. 24. The supply of existing single-family homes was at 10.2 months in September—the highest since February, 1988. Compare that with the height of the housing boom in January, 2005, when it reached a record low 3.6 months.

Tighter lending standards, which are dampening sales, aren't helping housing inventories, though the NAR thinks mortgage availability is starting to improve. "Once the pent-up demand begins to move, we'll see housing supplies begin to ease and then prices will edge up," said NAR Senior Economist Lawrence Yun in a statement issued Oct. 24.

more.............................

Submitted by 4plexowner on October 31, 2007 - 7:36pm.

"Correction Houston, make that a catastrophe ..."

Vacant Homes at Record

The Census Bureau report also found that a record 17.9 million U.S. homes stood empty in the third quarter as lenders took possession of a growing number of properties in foreclosure.

http://www.bloomberg.com/apps/news?pid=2...

Submitted by Arraya on October 31, 2007 - 8:07pm.

So lets get this straight.

4.4 Million listed
17.9 Million vacant

So 13.5 million just siting vacant doing nothing. That can't be good.

Submitted by 4plexowner on October 31, 2007 - 8:13pm.

Hard to imagine that there are 13.5 million people in America who can afford to let a house sit vacant

One of my tenants is "vacant housing becomes rentals"

I believe rents are headed down as these vacant units find there way onto the rental markets of America

Submitted by Ash Housewares on October 31, 2007 - 8:19pm.

we have over 10 months inventory and the NAR is talking about about pent-up demand. Unbelievable. I guess I better buy now before all that pent up demand drives prices up.

Submitted by Portlock on October 31, 2007 - 8:19pm.

Gotta love Larry Yun: "Once the pent-up demand begins to move…..”

Buddy… i AM the pent-up demand, and I’m not moving until the supply of available homes is so great, the sellers have no choice but to bring their values back into line and admit their greed was a dumb decision...

Submitted by Arraya on October 31, 2007 - 8:23pm.

"I believe rents are headed down as these vacant units find there way onto the rental markets of America"

Well it's not happening soon enough. My lease is up in December and rents are much higher this year than last, like 10%+. I've also noticed many of the places for rent have been for sale over the past 12 months. A lot of distress out there and it's trickling down to me.

Submitted by JWM in SD on October 31, 2007 - 8:22pm.

"Buddy… i AM the pent-up demand, and I’m not moving until the supply of available homes is so great, the sellers have no choice but to bring their values back into line and admit their greed was a dumb decision..."

Yes, precisely. Cash, time and no debt. That is what home sellers should fear the most right now. I don't have to buy a house until I want to buy one.

Submitted by patientrenter on October 31, 2007 - 8:33pm.

Does anyone here know if an increase in rents would go straight through to the CPI? (I.e. does the CPI imputed rent for homes reflect real rental rates?)

Patient renter in OC

Submitted by stansd on October 31, 2007 - 9:01pm.

Two thoughts:

1. The question of whether all the vacant homes is an isssue depends on how many of these there normally are. There are definitely a lot of vacation homes out there-a high absolute vacant number here doesn't necessarily mean squat. I've also seen other sites disputing the 13M number.

2. On imputed rents, I'm not sure I understand the question, but if home rents go up, yes this will filter through to the CPI. Of course, that's until they change the index they are following to exclude the volatile energy, food, and imputed rent categories.

Stan

Submitted by rankandfile on October 31, 2007 - 10:17pm.

Now I know why:

1) Both political parties want illegal immigration from Mexico - no other nationality is procreating fast enough to provide enough consumers to help buoy the lagging housing demand and failing social security fund.

2) The Fed talks a tough game about wanting to protect inflation but doesn't give a frog's fat @ss about it. The truth is the Fed is only concerned with short-term appeasement of politicians, high rollers and players in the financial and energy markets, and the sheeple who are stupid enough to believe that they are trying to actually help us. Amero, here we come!!!

The Fed is fully aware that all of the smoke and mirrors of the past 10 years was due to housing speculation. Why shut off the smoke machine now?

Vote Ron Paul 2008

Submitted by nostradamus on November 1, 2007 - 12:11am.

4.4 M homes for sale
13.5M homes vacant due to foreclosure

I smell a bank conspiracy! If the banks foreclose on everone, but don't re-sell the property, they can control inventory! They can just hold out, like they did in Boston! Evil!

Submitted by 4plexowner on November 1, 2007 - 5:08am.

Here's Mish's take on these numbers - by his calculations there are 15.8 vacant homes total (listed & unlisted) - he makes some observations that hadn't occurred to me

http://globaleconomicanalysis.blogspot.c...

Submitted by kewp on November 1, 2007 - 7:08am.

I smell a bank conspiracy! If the banks foreclose on everone, but don't re-sell the property, they can control inventory! They can just hold out, like they did in Boston! Evil!

In any other industry this would be racketeering.

Submitted by cr on November 1, 2007 - 9:04am.

"Hard to imagine that there are 13.5 million people in America who can afford to let a house sit vacant"

A majority of those are probably bank owned or owned by builders or those who financed the builders.

Banks would have no reason to hold on to millions of dollars of unsold homes in a depreciating market. They'll sell, just look at Countrywide's foreclosure listings. They add more everyday.

Submitted by kewp on November 1, 2007 - 9:24am.

Banks would have no reason to hold on to millions of dollars of unsold homes in a depreciating market.

They sure do, when each sale lowers the value of all the rest!

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