BANGOR, Maine — Home and rental unit vacancy rates buried in data released recently by the U.S. Census Bureau show what real estate agents and property managers are seeing on a day-to-day basis: increasing numbers of empty homes, fewer buyers and renters, and dropping prices.
For social services agencies that help the needy find shelter, the data could have ramifications which reverberate for years, such as increases in the value of Section 8 rental vouchers and, on a more long-term scale, impacts on where organizations such as the Maine Housing Authority choose to build new low-income housing.
“In general — and landlords don’t like to hear this — higher vacancy rates mean that rental housing is going to become a little more affordable,” said Bob King, a senior research analyst for MaineHousing.
The same is true for home buyers, according to David Caliendo, a broker with a firm called Bangor Real Estate.
“Prices are down, plain and simple,” said Caliendo, who specializes in distressed and foreclosed properties. “There’s less demand for housing, fewer people who are out there buying, and more people who are holding off buying. Everyone’s looking for a bargain price right now.”
Here are the numbers: According to census data released two weeks ago, 2.4 percent of nonrental homes in Maine were vacant in 2010, up from 1.7 percent vacancy in 2000. The numbers for rental properties were higher, with 8.9 percent vacant in 2010 compared with 7 percent in 2000. Oxford County had the highest rental vacancy rate in the state at almost 13 percent while Cumberland County had the lowest at 6.6 percent. Statewide, 71.3 percent of all occupied housing units were owner-occupied in 2010, according to the State Planning Office, with the rest falling in the rental category.
Earl Black, president of Better Homes and Gardens Real Estate Town and Country, has offices in numerous Maine communities — from small towns to larger service centers to coastal areas. He said each area’s real estate and rental market is unique, but that with the exception of the coast, the census figures ring true in his experience.
“Places like Portland and Bangor are more stable, but that doesn’t mean they’re not hurting,” said Black. “A larger service center like Bangor has a lot of economic activity, while a place like Millinocket, which just had a mill closure, they’re dealing with a very tough market on both sales and rentals.”
Caliendo, along with Black, said the pressures on the real estate and rental markets resulted from obvious events, such as vastly inflated home prices that ransacked the real estate market in recent years and triggered the economic recession that began in 2008. Events like those push more homes into the surplus column and more buyers out of the market.
Caliendo said slower sales are spurring some property owners to resort to unusual methods, such as renting homes they are trying to sell.
“If you get a transfer in your job, you’ve got to go while your prior house sits vacant,” said Caliendo. “I haven’t seen it bottom out yet, but we do notice a continued erosion and softening of the market.”
A decade or more ago, foreclosures, short-sales and distressed properties were rare in Caliendo’s experience, usually with fewer than six such properties listed at any given time. He said last year that number often spiked above 40 homes in that category, with numbers still near that level today.
“One of the strengths of my agency is that we do a lot of work with foreclosed and distressed properties,” said Caliendo. “Unfortunately, business is very good.”
Data released Thursday through the Maine Association of Realtors corroborated the effects of the burst housing bubble and its effect on prices. Home sales in April 2011 dropped by nearly 24 percent from April 2010 and sale prices on average slipped 2.8 percent, to $160,750. The only county that increased the number of units sold was Washington County, where a paltry 13 homes were sold in the quarter ending in April of this year compared to 12 in the same period in 2010. The next-lowest county total was in Piscataquis County, where 40 homes were sold in February through April.
Rising vacancy rates do more than ruffle supply-and-demand in the housing market. According to King, the data analyst for MaineHousing, vacancy rates are a key part of a complicated formula his agency and the federal Department of Housing and Urban Development use to set income limits for rental vouchers as well as the value of the vouchers themselves. He said the recent census data, including population counts and income statistics, will come into play later this year for income and voucher rates that will take effect in January 2012.
“We’ll use all of that data to look at affordability for the various types of housing,” he said. “It drives a lot of our programs. We re-examine the data every year.”
If the Bangor Housing Authority is any indication, there might be changes on the horizon. Brenda Brown, assistant director of the BHA, said her agency has a waiting list of about eight months. After a year of accepting no new applications, the authority opened the process again last month, attracting about 220 people who either called or visited the authority’s office to submit pre-applications. Brown said the reason for soliciting applications is so the agency will be prepared if HUD increases its allocation to Maine.
“It’s always a see-saw,” she said. “We don’t know how much we’re going to receive from HUD from year to year.”
Suzanne Kelly, owner of Kelly Realty Management of Bangor, who manages approximately 80 rental units, said in general she has seen few or no vacancies in recent months, a fact she attributes to the desirability and downtown locations of most of her apartments. However, there are signs that things are changing, she said.
Last November, an upscale two-bedroom apartment on High Street in Bangor opened up after the tenant opted to take advantage of low home-sales prices. In Kelly’s experience a desirable townhouse apartment with parking like the one on High Street — where the rent is $1,100, including heat and hot water — is snapped up as soon as it’s vacant.
“For what it is, that’s a very good deal,” she said. “What happened was I had a townhouse that I’ve never had empty be empty for six months. I did rent it this spring.”
Kelly said a high residential vacancy rate — and the resulting lower price of home ownership — are putting pressure on the rental market.
“People who would not ordinarily be buying houses, they look at the market and see that the prices are so low they can’t justify renting,” she said. “That’s the big difference I’m seeing.”