Home Vacancy Rates Post Sharp Increases

Wall Street Journal (03/21/08) P. A4; Phillips, Matt
The U.S. Census Bureau reports a jump in the national homeowner vacancy rate to 2.8 percent in the fourth quarter from 2.7 percent in the third quarter, leading some economists to believe additional home-price declines are on the horizon. Florida accounts for some of the highest homeowner vacancy rates in the country--including 7.4 percent in Orlando, 5.1 percent in Tampa-St. Petersburg-Clearwater, 4.6 percent in Jacksonville and 4.4 percent in Miami-Ft. Lauderdale. According to Global Insight managing director of regional services Jim Diffley, "The higher the vacancy rate, the greater is the degree of stress on pricing. It's a measure of how far the market is out of whack." Homeowner vacancy rates also are on the rise in some western cities, climbing to 4.2 percent in Sacramento and 3.7 percent in Phoenix-Mesa-Scottsdale, for instance. However, when gauging home-price trends, economists also look at the job market, population growth and the strength of the local economy. University of Pennsylvania Wharton School real estate and finance professor Joseph Gyourko argues that Michigan is more of a worry than Florida because Florida's economy and population growth are robust, while Michigan's economy shows signs of weakness.