In spite of the fact that last year’s home sales were the best they had been in years, there are still a lot of empty homes in Phoenix. As long as this is the case, the housing market cannot fully recover, and new home sales will be impacted. It looks like, however, that the vacancy rate is going to be up for awhile. [Thanks L!]
New research from On Numbers shows that as of 2011, the most recent year for which data is available, there were roughly 1.8 million housing units in the Phoenix area and about 283,000 were vacant. That vacancy rate of 15.63 percent is the 16th highest in the nation among the 109 metros areas with at least 200,000 residences.
What Phoenix needs is for people to move in and fill those homes. You would think that would be an easy sell. Phoenix has a record of a high rate of growth, with many people moving in for warmer weather and a lower cost of living. That rate has not only slowed though, it looks like more people may be leaving than coming:
A sagging economy and a lousy housing market have made leaving Arizona more popular than moving to it in recent years, a leading moving company’s statistics show.
While Atlas Van Lines’ migration statistics represent only a small sample of all who move across state lines, its numbers are in line with other available migration statistics and are probably valid, said Marshall Vest, a University of Arizona economist who has tracked population data for many years.
More people moved from Arizona on Atlas than moved into it in four of the past five years, the company’s statistics show.
If you go back to 2003-05, there were several hundred more in-moves than out-moves in Arizona. In 2004, the difference was 845, which was the peak.
What has changed since then is that the number of in-movers has dropped off significantly – the number of people who moved into Arizona for 2012 was only 53.5 percent of what it was in 2004.
Out-movers have also declined, but only by 26 percent.
Home sales have been brisk, but that has been driven by investors, who assume that there will be a huge demand for rentals. Investors now own a huge percent of Phoenix housing stock:
Real-estate investment firms owning nearly 20%, or one out of every five, of the region’s single-family houses and condominiums. That’s double the number of rentals considered normal in metro Phoenix in 2000, according to housing-market analysts. Wide swaths of the metro area now show 25-30% of all house are investor-owned. The pace quickened in 2012, as investors have purchased more than 30%of all single-family houses and condominiums sold. Investors now own 225,000 homes.
Investors may find that a falling, or even a more stagnant population, is tough on rents. The ROI on a vacant single family home can drop quickly when it’s not occupied, and there is a greater potential for vandalism. This may not become the renter’s paradise they envision. It’s tough to fill empty houses when people are leaving.