Miami has the highest household vacancy rate among the nation’s 50 largest metro areas, according to a new study by the online loan marketplace, LendingTree.
Vacancies include housing that is for seasonal use or that is for sale or for rent and unoccupied. Using data recorded by the Census Bureau, LendingTree calculated that 17 percent of the Miami metro area’s 2.5 million households are vacant.
The study found more than 236,000 homes were secondary residences, making up the majority of the vacancies. In a housing market that is experiencing a shortage of affordable housing, Lending Tree’s chief economist, Tendayi Kapfidze, said such households have limited the supply of available housing.
“Vacant homes that people use occasionally throughout the year are not available to people who live in Miami full-time,” Kapfidze said. “It means that those people are competing for a slightly smaller pool of homes than they would have otherwise.”
Tampa and Orlando — which are also popular destinations for secondary homes — rounded out the top three cities with the highest vacancy rates. Jacksonville, New Orleans, Phoenix and Memphis also finished with among the 10 highest rates.
By comparison, the study found Denver, Minneapolis and San Jose, Calif. finished with the lowest rates, in part because of strong job opportunities and an influx of millennial homebuyers.
The Miami metro area has the highest number of households that are for seasonal or occasional use, followed by New York. Miami-Dade County already has one of the worst rent-to-income ratios in the country, with more than half of all families spending more than 30 percent of their income on rent. Kapfidze said the secondary vacant homes — many of them owned by foreigners — are keeping prices high by tightening the supply of housing.
“I think the best way to [address this] is by adding supply. So make it easier to build and add new housing units,” Kapfidze said.
Still, local real estate analyst Peter Zalewksi noted that the housing supply in parts of Miami has begun to loosen.
An oversupply of housing units is causing rents to fall in areas like Downtown Miami, and owners are selling their units for less than they bought them for. Zalewski said developers have overbuilt and South Florida real estate is no longer as attractive for secondary homes for foreigners, in part because of the strengthening dollar.
“Anybody who is looking for a unit and willing to negotiate” can save “because what’s asked versus what the places actually transact at is dramatically different,” he said.