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If I was afraid to lease out one of my rentals (I have 3), I certainly would be selling it, rather than having it sit empty, especially in the current market. That said - anecdata doesn’t change the actual data showing that Kingran’s assertion that houses being held off the market are increasing both in number and percent of total homes is incorrect.

AJ, I was only giving anecdotal evidence of one couples decision. I wasn’t trying to prove either of you right or wrong, but you might have sold. But since they have 4 condo’s sitting on the beach in California, and they have had them for a number of years, there are many other considerations to think about than just rent. I am sure you would agree.

Andy

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But since they have 4 condo’s sitting on the beach in California, and they have had them for a number of years, there are many other considerations to think about than just rent. I am sure you would agree.

I’m sure that there are other considerations, like capital gains and depreciation recapture taxes. But it doesn’t seem be the best use of capital to have a rental property sitting vacant, especially since they’re having to pay condo fees and California non-owner occupant property taxes. And technically, if they have taken the property out of service as a rental, they can’t even claim depreciation or any other expenses on their taxes, which just adds insult to injury.

AJ

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23

Kingran’s assertion that houses being held off the market are increasing both in number and percent of total homes is incorrect

Here is the data. If you see before COVID, it was 7.6 M units were held off market, it came down a bit during COVID and bounced back to 6.9 M units.

How you arrived my “assertion” is wrong? Rather I repeated the details I received from a research service I subscribe to.

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https://fred.stlouisfed.org/series/EOFFMARUSQ176N

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No you are correct AJ, it doesn’t make sense to me either but sometimes fear is a stronger motivator than money. Also, since they only have 2 condo’s sitting empty, and they are in their 70’s. Money doesn’t seem to be a driver of their motivation like it was when they were younger. I asked them why they didn’t Airbnb them but they said that was to much trouble LOL.

Andy

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Here is the data. If you see before COVID, it was 7.6 M units were held off market, it came down a bit during COVID and bounced back to 6.9 M units.

I would remind you that the supply problem that you are saying isn’t that bad started accelerating in Q2 2020. Yet, beginning Q2 2020, the number of houses held off market for every quarter has been lower than every quarter from Q1 2010 through Q1 2020. How does that data support the assertion that There is a significant number of houses are held off the market, and this number is increasing as a % of overall housing.? Not only are the raw numbers lower, the number of total housing units increased from 131MM in Q1 2010 to 142MM in Q2 2021 https://www.census.gov/housing/hvs/data/histtab8.xlsx Therefore, having 7.1MM houses held off the market in Q1 2010 vs 7.0MM in Q2 2021, was a decrease of the total housing percentage from 5.34% to 4.93%

How you arrived my “assertion” is wrong? Rather I repeated the details I received from a research service I subscribe to.

Because the numbers say that it is wrong, as demonstrated above.

AJ

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27

would remind you

I mentioned the problem is getting worse over a period. IF you look at the chart the numbers are steadily increasing from 2002.

7.6M are significant inventory. Let us assume even half of it can come back to market that is 2 years of construction.

Now, if you can plot the held off market vs total inventory from the time the data is available, you can see how the number increased from 3.2% to current 7%.

I am not sure you are looking at the number with a proper historical context. IN any case, if you think 7.6M “off the market” coming to market is not going to make any difference, then there is nothing to talk.

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28

I mentioned the problem is getting worse over a period.

Actually, no, you didn’t. You said The supply demand is not really as bad as many project. There is a significant number of houses are held off the market, and this number is increasing as a % of overall housing. I don’t know the reason, or the drivers. This is not vacation homes, homes waiting to be rented or waiting to be sold. These are houses, where the owners simply takes them off the market, just holding it as an asset, like gold bars in your locker. There is no mention of ‘over a period’ or ‘over time’ in what you said.

And when I asked you for data, you focused on 2 data points - 7.6MM before COVID and the 6.9MM it bounced back to in 2021. That’s a short timeframe, not ‘a period’.

IF you look at the chart the numbers are steadily increasing from 2002.

The raw numbers on the chart, but not so much the percentage of the housing supply, which in the timeframe you are now looking at, has varied from 4.5% up to 5.6% and is now back down at 4.9% - near the midpoint.

Year   All housing units   Held off market   Percent
2002      119,297              5,362         4.49%
2003      120,834              5,671         4.69%
2004      122,187              5,784         4.73%
2005      123,925              5,684         4.59%
2006      126,012              5,778         4.59%
2007      127,958              6,181         4.83%
2008      130,113              6,579         5.06%
2009      130,159              6,737         5.18%
2010      130,599              7,120         5.45%
2011      132,292              7,266         5.49%
2012      132,778              7,433         5.60%
2013      132,799              7,420         5.59%
2014      133,270              7,468         5.60%
2015      134,700              7,201         5.35%
2016      135,577              7,335         5.41%
2017      136,570              7,358         5.39%
2018      138,449              7,463         5.39%
2019      139,641              7,513         5.38%
2020      140,803              6,685         4.75%
2021      141,947              6,981         4.92%

Now, if you can plot the held off market vs total inventory from the time the data is available, you can see how the number increased from 3.2% to current 7%.

Oh, so now you want to go back to 1965 to get to the 3.2% number? Really? And the current number is NOT 7%, it’s 4.9% The highest it’s ever been is 5.6%

I am not sure you are looking at the number with a proper historical context. IN any case, if you think 7.6M “off the market” coming to market is not going to make any difference, then there is nothing to talk.

Well, it’s only 7.0MM, but you are the one who doesn’t seem to understand the entire context. Even those 7.0MM aren’t going to magically come back on the market if they haven’t already. History shows that. Besides, of the 7.0MM, 2.0MM are for ‘occasional use’, so not totally vacant, 1.2MM are ‘URE’, which is ‘temporarily used by someone who resides elsewhere’ - so again, not really vacant, and the remaining 3.7MM units are not available for other reasons, which is often that they are being repaired and/or remodeled. (You have seen how many people are flipping houses, now, right? Not to mention, the houses that are have been damaged by fires, floods, tornadoes, hurricanes, landslides, or some combination of such.) So, I’m not sure why you think that those units held off the market would suddenly come back on the market.

AJ

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