There are promising real estate trends for 2023 about the demand of houses and affordability of them. Yet it still doesn’t appear to be the best time for prospective homeowners to jump into the market.
Prospective home buyers who are frustrated with the continued high prices of available houses may not be happy to hear that 16 million homes in America are considered vacant. And these are homes located in major (and desirable) U.S. cities.
However, just because a home is vacant doesn’t mean it’s for sale. Some vacant homes are vacation homes, while others are uninhabitable.
To figure out why so many homes are vacant — and where these vacant homes are — Today’s Homeowner compared data from 179 of the largest U.S. cities. We looked at vacancy numbers compared to the total number of homes and how these metrics compared to median income and home values. Check out our findings below.
- Roughly 9% of homes (16 million) in America are considered vacant.
- The top 10 U.S. cities with the highest vacancy rates are in the South or Midwest.
- Nearly one-third (32.8%) of vacant homes are vacation homes for seasonal or recreational use.
- The cities with the highest percentage of vacant homes as vacation homes include Scottsdale, Arizona along with Miami Beach and Pompano Beach, Florida.
What Is a ‘Vacant Home?’
The U.S. Census Bureau has a broad definition of what it considers a “vacant home.” For our survey, we consider a home vacant if it has any of the following qualities:
- No one lived there at the time of the census interview unless those living there had been gone for less than six months.
- It’s used as a second home, or “vacation home.”
- It’s a rental home that may or may not have tenants.
- It’s a habitable home that’s being prepped for sale.
- It was sold to new owners, but no one lives there yet.
- Migrant workers live there temporarily.
The Census Bureau has a separate category of “other” vacant homes. These include houses under foreclosure, being used for storage, needing maintenance or are abandoned. The breakdown of vacant homes in the U.S. is shown below.
Cities With the Most Vacant Homes
The most notable trend came from cities with the highest home vacancy rates, mainly in the South and Midwest.
In Florida, Miami Beach (No. 1) and Pompano Beach (No. 4) have many vacant homes, but most are vacation homes. (We’ll discuss this more in the next section.) That was not the case for cities like Asheville, North Carolina, (No. 2) and Detroit, Michigan (No. 3), whose vacation home rates are under 6%.
Why does Asheville have such a high vacancy rate? Nearly 16% of the city’s vacant homes are for sale. That makes Asheville the city with the highest percentage of vacant homes waiting to be sold. The next highest city – Harlingen, Texas – trails far behind with 2.5% of vacant homes for sale.
When we asked real estate experts about Asheville’s high vacancy rates, most attributed it to a disconnect between available properties and buyer preferences, plus local economic factors.
“[Asheville’s] local economy is undergoing a period of slump,” said Troy Shaffer, founder of Blu Corporate Housing, a national short-term housing rental company. “This has caused a decrease in the residing population, and individuals are moving toward more prosperous states. The supply remains the same, whereas the demand falls, leading to an increase in the vacancy rate.”
“Market conditions are not positive for buyers or sellers. Asheville has faced a 23% spike in home prices,” said Jasen Edwards, real estate agent and chair of the Agent Advice editorial board. “Buyers are waiting for the prices to drop before making such an investment.”
However, the third-highest city for vacancy rates — Detroit, Michigan — doesn’t have many vacant vacation homes (1.2%) or for sale (1.5%). Instead, most of the city’s vacant homes (17%) are vacant for other reasons.
“[It] could be due to a combination of factors such as a significant number of foreclosures, homes in disrepair, making them uninhabitable, or abandoned properties awaiting demolition or condemnation,” said Eric Bramlett, realtor at Bramlett Residential.
With a median income of $36,140, Detroit has the third-lowest average income of the 179 cities in our study. However, the city also has the third-lowest average home value of $105,900, which is likely why the city has a homeownership rate of 51.28%.
“Detroit's relatively average homeownership rate, despite the low median income, might be attributed to more affordable housing options or an increased prevalence of multi-generational households,” Bramlett told Today’s Homeowner.
Shaffer acknowledged how Detroit’s “unsteady” market conditions could be contributing to the city’s high vacancy rate.
“The main reason is the decline of the automotive industry, which was the backbone of Detroit's economy for many years,” Shaffer said. “The loss of jobs in the automotive sector has led to a significant decrease in population, leaving many homes vacant and abandoned.”
Where Are Vacation Homes Contributing to High Vacancy Rates?
Nearly one-third (32.8%) of U.S. vacant homes are vacation homes for seasonal or recreational use. Not surprisingly, popular vacation destinations in Arizona and Florida had the highest percentage of vacant homes acting as vacation homes. In fact, the top 12 cities with the highest were located in these two sunny states.
Additionally, more than half of vacant homes can be attributed to vacation homes in eight cities, as seen below. The top cities with vacation homes contributing to vacancies are Scottsdale, Arizona and Miami Beach, Florida.
Are Vacation Homes Keeping Others From Homeownership?
Housing data suggests vacation homes are driving up the median home prices in cities where resident income can’t keep up.
In short, affluent out-of-towners buying vacation homes may prevent locals from acquiring their first homes.
In the top five cities that have vacant vacation homes, the median home price was above the U.S. average of $261,400. However, only one of these cities — Scottsdale, Arizona — has a median household income above the national average of $70,784.
Realtor and Luxury So Cal Realty founder Joy Aumann said the high rate of get-away homes in South Florida cities like Miami Beach and Pompano Beach is “driving up domestic costs and making it more troublesome” for local residents to afford a house.
“Excursion homes can certainly be a profitable speculation for mortgage holders, [but] it's imperative to consider the effect they may have on the general lodging showcase and the reasonableness of lodging for all inhabitants.” Aumann told Today’s Homeowner.
Texas realtor Bramlett said that while vacation homes can certainly drive up home prices and create scarcity in the market, it’s not the only factor.
“This trend may depend on the specific city and its unique economic factors,” Bramlett said.
Cities With the Fewest Vacant Homes
In theory, having a low percentage of vacant homes would imply that a city has a strong demand for homes and less supply on the market. This theory seems true for most of the top cities with the fewest percentage of vacant homes.
For example, Gilbert, Arizona has the lowest home vacancy rate (2.1%) of the 179 cities we analyzed. The once-small Arizona town saw a 132.8% population increase from 2000-21, growing faster than 97% of similarly sized cities.1
According to The Phoenix Business Journal, Gilbert’s popularity rose because of its low crime rate, good schools and lower cost of living compared to surrounding boom areas like Scottsdale, Phoenix, and Tempe.
The population of Broken Arrow, Oklahoma (No. 2 on the list of fewest vacant homes) increased by 3.88% since the 2020 census.2 Its average home value rose 7.9% over the past year, with homes sitting on the market for just two weeks, according to data from Zillow.3
Similarly, once-affordable Fresno, California (No. 3) saw an influx of residents during the pandemic, leading to a major housing shortage there. Most newcomers escaped the high costs of living in Los Angeles and San Francisco.4
Data for this study comes from the Census Bureau’s 1-year 2021 American Community Survey. Today’s Homeowner compared data across 179 of the largest U.S. cities to determine the cities with the fewest vacant homes. We looked at two metrics: the number of vacant homes (including all seven Census-designated types of vacancies) and the total number of homes.