Florida can't seem to catch a break these days, especially when it comes to its housing market. First, the news (or not-so-news, if you actually live there) broke that Florida had the highest rate of foreclosures of any state in the union during the last quarter of 2010. And now, in a striking example of it pouring when it rains - even in the Sunshine State, another stunningly bad real estate stat: Nearly 20% of the homes, all homes, in Florida are vacant. Vacant as in no one lives there. At all. When almost 1 in 5 homes in a state are vacant, it gives new, economically dismal meaning to the phrase "no one's home."
This data, revealed by the Census Bureau, shows that 18% of all Florida homes, more than 1.6 million properties to be precise, have fallen into vacancy for one reason or another. To give this some context, this is a 63% increase in vacancies in the last 10 years. These homes largely fall into two categories: new homes that were built, and never sold in the first place, and homes that were once occupied, but have been foreclosed on, followed by the eviction of the homeowners.
But Florida's vacancy rates are extreme, even when compared to the other foreclosure hot spots: California only has an 8% vacancy rate and 16% of Arizona homes are unoccupied. Even Nevada, which has had more total foreclosures than any other state during the four-year-long real estate recession during the real estate recession, only has a 14% vacancy rate.
This is not good for Florida on multiple levels. First, vacant homes often turn into a liability to the surrounding neighborhood and community. These unattended spaces can become a haven for squatters and crime; they are also often unkempt, creating a visual blight -- an eyesore -- in the neighborhood. Additionally, many times these vacant homes are properties on which no one is paying the property taxes or homeowners association (HOA) dues, even though someone, somewhere -- be it the bank, the developer-owner or even an individual homeowner who is in the process of strategically defaulting on their home -- should be. These unpaid fees create a budget crunch for local governments and the other homeowners in the HOA.
Worst of all, these vacancies generally reflect a surplus of homes, in that there are simply more homes than there are people in the state to fill them. This steep surplus is the classic example of the kind of supply-demand imbalance that will keep housing prices low for a long, long time to come. New sales activity data shows that we're currently seeing the lowest rate of home sales, nationwide, that we've seen in the last nine years. At that rate, it could take years for the excess inventory on Florida's market to be absorbed, which will hamper the recovery of the Sunshine State's already troubled real estate market.
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