Long-Term Vacancy in the United States

40 Pages Posted: 1 Oct 2014

See all articles by Raven Molloy

Raven Molloy

Board of Governors of the Federal Reserve System

Date Written: September 5, 2014

Abstract

Because housing is durable, the housing supply is slow to adapt to declines in demand. This paper uses long-term vacancy -- defined as nonseasonal housing units that have been vacant for an unusually long period of time -- to quantify the extent of excess supply in the housing market. I find that long-term vacancy is less than 2 percent of all nonseasonal housing units and accounts for only one quarter of the aggregate increase in nonseasonal vacancy from 2001 to 2011. Thus, at the national level, excess supply is considerably less extensive than indicated by traditional measures of vacancy. However, the stock of long-term vacant housing is concentrated in a small number of neighborhoods that do have appreciably high long-term vacancy rates. Some of these neighborhoods have characteristics suggesting that excess supply is related to overbuilding during the housing boom, while others have characteristics that are symptomatic of persistently weak housing demand.

Keywords: Vacancy, excess housing supply

JEL Classification: R2, R3

Suggested Citation

Molloy, Raven, Long-Term Vacancy in the United States (September 5, 2014). FEDS Working Paper No. 2014-73. Available at SSRN: https://ssrn.com/abstract=2503443 or http://dx.doi.org/10.2139/ssrn.2503443

Raven Molloy (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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