[RoninLB]

from above article and snipped



Mr. Ahmed of J.P. Morgan says the homeowner vacancy rate calculates vacant homes that are residential year-round, and is supposed to exclude homes that are used occasionally as vacation homes, which have been growing in number in recent years. He says it's possible the vacancy rate may have captured some of these seasonal properties inadvertently. The high vacancy rate also may have been affected by the active 2005 hurricane season that forced residents to flee the Gulf Coast.......



.........The vacancy indicator may help distinguish between the sellers who have casually listed their house on the market to see what price they can fetch, versus sellers who are under real pressure to sell. The owner of a vacant home -- who may be squeezed by mortgage payments for the vacant home as well as a current residence -- could be more willing to drop the price to minimize the cost, than a homeowner who lives in the home and doesn't have to sell..........



.........Many economists agree, however, that rising vacancies have likely been fueled by a group that is proving to be the wild card of this housing market: speculators. During the boom, they flooded the market and flipped homes for a profit. When sales slowed, speculators were stuck with vacant homes that have lingered on the market.

There's no doubt speculators had a major impact, but their numbers have been difficult to quantify. The recent vacancy data may be a useful measure of speculative activity and its fallout.

"I think a persuasive case can be made that the reason we are seeing such extraordinarily excessive vacancy is because of the heavy investor demand over the past few years," said Richard DeKaser, chief economist at National City Corp.

What's troubling is that speculators may not act like typical home sellers. When they sell their vacant home in a down market, they don't necessarily purchase another home. By contrast, people selling the homes they live in will most often buy another house -- thus fueling a healthy market of buying and selling.

Not surprisingly, buildings with five or more units -- which include condos that were magnets for speculators -- had the highest rate of vacancy. The vacancy rate among these units rose to 11% in the fourth quarter from 7% in the first quarter. For single-family homes, the vacancy rate rose to 2.3% in the fourth quarter from 1.8% in the first quarter.

Mr. Hatzius expects homeowner vacancies will slow, as builders cut back on production and owners convert their units to rentals to take advantage of rising rents. But then again, the housing market has been full of surprises.

"This whole thing has been new," says Mr. Seiders, the National Association of Home Builders' economist. "We've never seen this kind of investor activity and we've never seen this kind of [vacancy] resale. It's an extra complication moving forward."