The Real Deal New York

Inventory crunch persists despite high vacancy rate: Trulia

November 07, 2013 09:58AM

Despite the vacancy rate holding steady from last year, the inventory crunch keeps getting worse, according to a new report from real estate listings site Trulia.

The nationwide vacancy rate was 10.2 percent in the third quarter of 2013, the same as last year. The figure includes both rental and sales units, as well as those that are vacant but not on the market. But still, homebuyers are having an increasingly hard time finding homes.

The reason is that many vacant homes remain off the market, and the number of these homes is increasing, the Wall Street Journal reported. Indeed, 53.4 percent of vacant homes were held off the market in the third quarter of this year, compared to 52.9 percent in the third quarter 2012, according to the newspaper.

One of the biggest contributing factors to this trend is that investors who bought these vacant homes are renovating and upgrading them to command higher rental or sales prices, according to the Journal.

Trulia’s chief economist Jed Kolko said in the report that the high vacancy rate was acting as a deterrent to homebuilders and hence was impeding the housing recovery. “For construction, and the housing market overall, to return to normal, more vacant homes must be occupied,” Kolko said. [WSJ]Hiten Samtani