December 13, 2011
The NYT cited Mark Zandi as saying the number of vacant homes is roughly 1 million, which he puts as equal to the gap in household formation that resulted from the recession. According to the Commerce Department, if the vacancy rate was back at its pre-bubble level, there would be 3 million fewer vacant units.
Addendum: Calculated Risk argues that Zandi’s vacancy number is closer to the mark than the Census number. The core of the argument is that the rate of housing destruction should be much higher than implied by the Census data, based on construction data and the change in the stock of housing.
What I think he is missing is that the construction data only include homes built from scratch. During the bubble years there were a lot of dilapidated structures that were renovated and turned into usable housing units. You also had some commercial and industrial properties that were converted into residential units. These units would not be picked up in the new construction data. The units in these categories could easily fill the gap that CR identifies between a reasonable rate of housing destruction and the numbers implied by calculating the change in the housing stock and subtracting new construction.
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