San Jose, California has the nation’s lowest homeowner vacancy rate — the proportion of homeowner housing inventory that is vacant for sale — followed closely by Minneapolis and Denver.
That’s according to a new study from LendingTree, the online loan marketplace, which ranked the nation’s 50 largest metropolitan areas from highest to lowest homeowner vacancy rates. Typically, areas with higher vacancy rates are more affordable to the average consumer, but that doesn’t necessarily mean that areas with high vacancy rates are always going to be more affordable than areas with lower rates, the company noted.
San Jose, California, has a vacancy rate of 4.26 percent, the lowest in the nation. Minneapolis and Denver follow with vacancy rates of 4.96 percent and 5.35 percent, respectively.
Vacancy rates in these areas are low for a variety of reasons, ranging from strong job opportunities to a growing influx of millennial homebuyers, LendingTree noted. People looking to sell their home will likely have an easy time in any of these metros, but future homeowners who are in the market to buy might struggle to find a place, the company said.
Three Florida cities — Miami, Orlando and Tampa — have the highest vacancy rates in the nation. Their vacancy rates of 17.09 percent, 15.93 percent and 15.25 percent are well above the overall metropolitan average of 9.44 percent. One of the main reasons vacancy rates are so high in these areas is that Florida is a popular destination for homeowners to buy secondary residences, which often remain unused throughout most of the year, with their owners only living in them during select times, like winter.
Some metros have high vacancy rates for more negative reasons. For example, even when part-time residences are not considered as part of the vacancy rate, Birmingham, Alabama, Memphis, Tennessee. and New Orleans all still have vacancy rates above 11 percent. Many factors contribute to these high rates, ranging from sudden influxes of newly available homes and apartments, to sluggish economic growth.
People looking to buy a home might want to consider moving to places like Pittsburgh, Cleveland or Memphis, LendingTree noted. These metros all have high vacancy rates above 10 percent and median home values of lower than $150,000.
“Knowing the number of vacant homes in an area is an important part of understanding the overall health of the local housing market,” said Tendayi Kapfidze, chief economist at LendingTree. “For example, if both vacancy rates and home prices are relatively low, it could mean that sellers are parting with their homes for less money than they could have potentially received. If vacancy rates are low and housing prices are high, it could signify that the market is overly competitive, and that lower-income people might have a problem finding a house.”
Kapfidze continued, “On the flip side, high vacancy rates and high homes prices often suggest that an area has some unique characteristics, such as being a vacation hot spot or targeted by investors, which could mean the real estate is overpriced. High vacancy rates and low home prices might mean that an area is experiencing socioeconomic hardships, like high unemployment or crime rates.”
Total households: 676,737
Total occupied households: 647,891
Total vacant households: 28,846
% of households that are vacant: 4.26%Minneapolis
Total households: 1,426,299
Total occupied households: 1,355,503
Total vacant households: 70,796
% of households that are vacant: 4.96%Denver
Total households: 1,136,616
Total occupied households: 1,075,807
Total vacant households: 60,809
% of households that are vacant: 5.35%
Metros with the highest vacancy rates
Total households: 2,505,963
Total occupied households: 2,077,708
Total vacant households: 428,255
% of households that are vacant: 17.09%
Total households: 995,591
Total occupied households: 837,022
Total vacant households: 158,569
% of households that are vacant: 15.93%
Total households: 1,393,313
Total occupied households: 1,180,768
Total vacant households: 212,545
% of households that are vacant: 15.25%