New U.S. Census Bureau figures showing how home and apartment vacancies have soared in the state aren’t news for the residents of a block-long stretch of West Brown Street in the Phoenix suburb of Glendale.
Four of the 20 homes were vacant on Thursday, with “For Sale” signs in front of three and a notice of trustee’s sale plastered on the garage door of the fourth.
The vacancies fluster residents, who say the empty homes draw the wrong elements to the neighborhood and help drive the cycle of foreclosures that has plagued metropolitan Phoenix for nearly three years.
“I’m hoping that a few of my friends will come and join our area, because we used to be able to do barbecues and little groups and that’s kind of stopped,” said resident Sherri Gahr, who moved into the tidy neighborhood of homes built in the mid-1980s two years ago and has seen several other homes go through foreclosure.
Although the 20 percent vacancy rate on this small suburban street is well above the norm in the state, it’s not that far out of whack. Figures from the 2010 Census made public on Thursday show the number of vacant housing units not used as part-time or vacation homes soared to nearly one in 10 in Arizona.
The big increase came as builders added too many houses, the recession caused fewer people to move to Arizona and peopled doubled-up rather than create their own households.
The change that began after the Great Recession hit in December 2007 followed years of out-of-control homebuilding. The state added 655,000 new housing units between 2000 and 2010, bringing the total to 2.84 million single-family homes and apartments last year, up from 2.19 million just 10 years before. That’s far more than the state needed, experts say.
Excluding part-time or vacation homes, the number of vacant housing units stood at 9.8 percent when the census was taken, with 279,209 empty units last year, up from 145,897 a decade earlier. The rental vacancy rate was nearly 14 percent, while homeowner-vacancy rate was nearly 4 percent.
The numbers aren’t a surprise, said Scottsdale-based economist Elliott Pollack. The statewide vacancy rate has increased by about 3 percent in recent years, housing prices collapsed, apartment vacancy rates have soared and household formation has dropped.
“All this does for me is confirm what everybody seems to know: There are far too many vacant units, especially single-family units,” Pollack said. “It’s a combination of overbuilding and people not showing up and increases in household size, as people tend to double up during a recession.
“And the only solution is to wait it out, hope population grows again and hope the economy gets strong enough so that the average household size diminishes,” he said.
The building boom that gained steam in the mid-2000s added 42,000 vacation and second homes, according to the census bureau, bringing the total number of units used as part-time homes to 184,327.
But much of the building was driven by factors that skewed population and growth projections, said Jay Butler, a real estate studies professor at Arizona State University. Because population projections are based on building permits, and investors were grabbing up homes in the mid-2000s, builders thought more people were moving to the state than actually were.
“You have situations where people were buying the homes and renting them out and expecting to be able to flip ‘em to this massive number of people who were moving in, and that didn’t happen, so basically they just remained empty,” Butler said. “There was this sort of perpetual growth syndrome that was going on.”
The new census numbers highlight the huge changes in Arizona’s economy during the decade.
“We’re really looking at two very different economies,” Butler said.
“In the 2000 Census, things were bumping along pretty good — we had high building income, we were just moving into the hyper market, housing was getting extremely affordable, we had the dot-coms, and we had high levels of income,” he said. “This particular census is in the throes of horribleness. You could probably not get two more distinct end points than those two.”
For some in the Glendale neighborhood bordering West Brown Street, the vacant homes are an eyesore and a magnet, but not so bad as to make the place unsavory.
Paul Pawlowski, a retired corrections officer who moved to Glendale from Buffalo, N.Y., last July, said the vacant foreclosure across from his house is a concern but not enough of one for him to get bad feelings about the area.
“I’m worried, I see the door open,” he said as he took a break from cutting his small lawn. “I worry about kids getting into it, and it carries over to other houses.”
But Gahr, gazing at the foreclosures across the street, shrugged and said the problem was out of her control.
“For the banks, it costs the same to just let them sit than as it does to try to get somebody in there, especially if that person isn’t going to make their mortgage payments,” Gahr said. “I don’t understand it, yet at the same time I do.”