Thursday, February 15, 2007
KANGAS: The National Association of Realtors said today there are signs the housing slowdown could be bottoming out. The NAR says sales of previously owned homes in the United States fell in the fourth quarter from year-ago levels, marking the worst point for housing in the current cycle. That raises hopes the real estate market could now begin to show solid signs of life again. But as Stephanie Dhue reports, the NAR and others are concerned there is still one major problem: the growing number of vacant units.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Kent Laraway bought a condo with hopes of flipping it three years ago when the real estate market was red hot. By the time the unit was completed this winter, the real estate market had cooled. Laraway says canceling the contract would have cost him a $30,000 deposit.
KENT LARAWAY, HOUSING INVESTOR: I considered backing out of the contract and just dealing with whatever repercussion, but then after talking to a few people, I thought I could sell it and at least, break -- make a little money.
DHUE: Laraway's empty condo is part of a growing problem in the housing market, vacant houses. The Census Bureau reports that there were 2.1 million vacant homes for sale at the end of last year, an all time high and a 34 percent increase over 2005. Economist David Seiders says those vacancies are an issue for builders.
DAVID SEIDERS, ECONOMIST, NATIONAL ASSOCIATION OF HOME BUILDERS: If you have existing homes that are occupied and for sale, it's no big deal really because the seller is either going to buy something else or rent a unit somewhere, so it's a sign of vitality, almost. But if the composition of that for sale inventory is more heavily toward vacant units, then it's a heavier issue for the housing market overall.
DHUE: Realtors are also concerned about vacant property. Realtor David Bediz of Coldwell Banker says it's not just investors who leave homes empty.
DAVID BEDIZ, REALTOR, COLDWELL BANKER: There are people that have already bought a new place and have to move into that new place for one reason or another, family reasons, perhaps and in doing so, leave their own properties vacant.
DHUE: Home builders say the demand for new homes has improved but the hidden inventory of cancellations and vacant for sale properties, like this one, could delay a housing recovery. Stephanie Dhue, NIGHTLY BUSINESS REPORT, Washington.