Definitely true. Probably also worth considering that during a speculative boom there is a lot more turnover which will increase the proportion of properties sitting empty while they are on the market (not sure how significant this would be but another example of how a booming market can lead to a decrease in properties used as a permanent residence).
> A lot of houses are empty simply because they are for sale. It's not unusual to take 6 months to sell.
A thought: Disincentivize having them for sale for too long, tax a % of the listing price every year it's on the market. That way gougers get penalized for crazy asking prices and there's some additional negative price pressure.
All that would result in is less transparency. People wouldn't put their house openly for sale anyone and you'd just create informal market places. Or worse people would just hang onto properties and not sell them at all, biasing towards turning houses into rentals.
>Right. (Insurance, too.) It's very expensive to let a house sit vacant.
I'd argue it's not expensive enough since it's frequently done.
EDIT: This has already become a common issue in locations like NYC, big money parked into properties with many commercial and residential units vacant. Better to pass those fees and borrow against artificially inflated value than it is to realize a loss.
EDIT2: I typo'd and meant to say 'pay', not pass those fees. (as a cost of doing business)
Commenting on Walter's comment below:
> I've sold houses before. I hated every day it was sitting there sucking up money.
I understand, my problems are with institutional/large wealth artificially constraining supply.
> As for artificially inflated values, bank lenders are not stupid and are not going to loan against a phony value.
Do correct me if I'm wrong but is it really their problem if they can sell that risk or the gov bails the whole sector out when there's a panic?
Nobody is going to want homeless people living in it in the meantime.
Houses are also "empty" while they are undergoing renovation.