Miami is the metropolitan area with the second highest vacancy rate in the nation, according to a new study by online lending marketplace LendingTree.
Miami recorded a 12.65% vacancy rate out of 2.6 million homes, only behind New Orleans (13.88%). The national average for the 50 largest metro areas included in the study was 7.22%
LendingTree used the latest data from the U.S. Census Bureau American Community Survey to make the list and analyze the reasons why an area's vacancy rate can be important in understanding the health and character of its real estate market.
"So there are a lot of reasons why Miami has such a high vacancy rate, but a really big one stems from the fact that it's a really popular place for secondary homes," Senior Economist Jacob Channel, the author of the report, told NBC6.
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"So if you look at the total number of vacant units in Miami, more than half of them sit empty because they're only used part of the year," he added.
Over 339,000 homes sit empty in Miami and 53.32% of those homes are being used for seasonal or recreational uses like vacation homes or simply as a weekend home.
At first glance you might think because the area's vacancy rate is so high, then the supply must be really high, and that should drive down the prices.
Well, Miami is a particular and unique case, according the report, as it's a destination with a lot of lucrative characteristics that make it ideal for wealthy investors to buy up property.
"I think, as our study points out, that a lot of the times vacant homes aren't necessarily readily available, especially in the case of Miami, a lot of vacant homes are owned by someone, they're just not used year round in terms of rental units specifically," Channel said.
LendingTree also points out that the vacancy rate can fluctuate from day to day as it also takes into account apartments or homes that are sitting in the for sale/for rent market. It also takes into account apartments and homes that have already been sold or rented but people have not moved into them yet.
If you're looking for a new home there are some tips that can help you find the right deal.
HOME HUNTING TIPS:
- Find the best possible rate: Look at several other lenders and try to find the best rate. Lenders often compete for your business and by shopping around you may be able to secure a lower interest rate.
- Think of your essentials: Consider how much you need to pay for your food, clothes, health insurance, education (if you have kids) and any other expenses that you need to pay as well.
- Get pre-approved for your mortgage - With mortgages staying steady around the 7% mark, the best thing you can do is get a pre-approval from your mortgage lender as it helps speed up the process, gives you an idea of how much you can spend, and lets the seller know you're serious about your offer.
The process to change the trend and keep the home prices low is not an easy feat, but LendingTree recommends to continuously put pressure on local, state, and federal governments to "incentivize and get more lower income housing units built."
