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Posted by on Aug 9, 2012 in Shadow Inventory | 3 comments | Print Print

No Foreclosures = No Vacancy

MCLEAN, Va., Aug. 8, 2012 — Freddie Mac released today its U.S. Economic and Housing Market Outlook for August showing why the so-called shadow inventory might not be as foreboding as many thought and an important reason why is the rate at which excess housing is being absorbed.

Outlook Highlights

  • The Freddie Mac House Price Index for the U.S. showed a 4.8 percent gain from March to June 2012, the largest quarterly pickup in eight years; the national index posted a June-to-June rise of 1 percent, the largest annual appreciation since November 2006.
  • Rental vacancy rates have fallen to 8.6 percent, the lowest since the second quarter of 2002. The for-sale vacancy rate has dipped to 2.1 percent, the least since the second quarter of 2006.
  • Nationally, the for-rent market now appears to be in relatively good balance, with the rental stock close to overall rental demand, resulting in “normal” vacancy levels.
  • This continuing shrinkage in excess vacant stock is important because it means that in most markets the REO homes on the for-sale market are not competing with an oversized vacant housing inventory.
  • Even if national indexes dip in the seasonally weak autumn and winter months, the declines probably won’t be big enough to erase the good second-quarter news on home values.

Watch a short preview video and download the complete August 2012 U.S. Economic and Housing Market Outlook [PDF]. Freddie Mac compiles data on major economic and housing and mortgage market indicators and offers forecasts based on those indicators.

From Freddie Mac’s chief economist Frank Nothaft:

“While the shadow inventory persists, there is an important difference in today’s market compared with those of recent years and that’s the substantially reduced amount of excess vacant housing. The housing recovery may finally be coming out from the shadows.”


  1. The low excess for rent inventory is what is driving rents higher (not blazing fast, but faster than we’ve seen for nearly a decade).

    To put it in perspective, I paid the same or slightly lower rent for about 6-7 years (2004-2010). Rents went nowhere. Recently, I have seen movement, which, coupled with low interest rates is what drove the most recent purchase (bought a 50% larger place for about the same monthly).

    Of course, each person should do a personal assessment of their own personal calculation since owning a house carries many other unforeseen costs, like spousal unit mandated remodeling.


  2. Congratulations Chuck, and yes, bring the open checkbook for the S-U-M remodeling! 😆



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