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Empty houses could sell faster

Vacant homes, long considered a drag on the U.S. real estate market, are getting an image makeover courtesy of the coronavirus crisis, says Ken H. Johnson, Ph.D., an economist in Florida Atlantic University’s College of Business.

U.S. metropolitan residential real estate markets are peaking, and some cities are in another pricing bubble, according to the latest national index produced by Florida Atlantic University and Florida International University faculty. The Beracha, Hardin & Johnson Buy vs. Rent Index scale goes from minus-1 (good time to buy) to 1 (better to rent) with zero being neutral. Two metropolitan areas—Dallas (0.92) and Denver (0.77)—are significantly overheated and rapidly approaching a score of 1, said Ken Johnson (above), one of the index’s creators and associate dean and professor in FAU’s College of Business.
FAU’s Ken Johnson

Historically, vacant properties have sold at a discount due to poor condition and/or the financial distress of the owners, who want to sell quickly and minimize financial losses. But concerns about the spread of COVID-19 make this one of the best times ever to sell unoccupied homes, according to Johnson. With nobody living there, these properties offer reduced risk of exposure to the virus, so serious buyers are more willing to tour the homes and make offers close to market value.

“Vacant properties for sale are forming their own submarket,” he said. “We should not be surprised to see these homes shown more often than occupied properties, go under contract faster and sell at prices close to market value. Other occupied properties are simply in a separate, nearly non-functioning market at this point.”

Housing trends remain fluid due to the coronavirus, but Johnson, a former real estate broker who has researched the market for 25 years, said agents across the country are reporting increased demand for showing vacant properties, even while occupied homes are struggling to draw interest.

Sellers with the financial means may even want to consider temporarily moving out of their homes to stay with friends or in a hotel, a strategy that would open their properties to a larger pool of prospective buyers, Johnson said.

“These arrangements, while costly or inconvenient, could be the difference between selling your property and letting it sit for a very long period of time,” Johnson said. “Temporarily moving into alternative housing could produce higher selling prices as well, all else equal.”

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Drew Limsky

Drew Limsky

Editor-in-Chief

BIOGRAPHY

Drew Limsky joined Lifestyle Media Group in August 2020 as Editor-in-Chief of South Florida Business & Wealth. His first issue of SFBW, October 2020, heralded a reimagined structure, with new content categories and a slew of fresh visual themes. “As sort of a cross between Forbes and Robb Report, with a dash of GQ and Vogue,” Limsky says, “SFBW reflects South Florida’s increasingly sophisticated and dynamic business and cultural landscape.”

Limsky, an avid traveler, swimmer and film buff who holds a law degree and Ph.D. from New York University, likes to say, “I’m a doctor, but I can’t operate—except on your brand.” He wrote his dissertation on the nonfiction work of Joan Didion. Prior to that, Limsky received his B.A. in English, summa cum laude, from Emory University and earned his M.A. in literature at American University in connection with a Masters Scholar Award fellowship.

Limsky came to SFBW at the apex of a storied career in journalism and publishing that includes six previous lead editorial roles, including for some of the world’s best-known brands. He served as global editor-in-chief of Lexus magazine, founding editor-in-chief of custom lifestyle magazines for Cadillac and Holland America Line, and was the founding editor-in-chief of Modern Luxury Interiors South Florida. He also was the executive editor for B2B magazines for Acura and Honda Financial Services, and he served as travel editor for Conde Nast. Magazines under Limsky’s editorship have garnered more than 75 industry awards.

He has also written for many of the country’s top newspapers and magazines, including The New York Times, Washington Post, Los Angeles Times, Miami Herald, Boston Globe, USA Today, Worth, Robb Report, Afar, Time Out New York, National Geographic Traveler, Men’s Journal, Ritz-Carlton, Elite Traveler, Florida Design, Metropolis and Architectural Digest Mexico. His other clients have included Four Seasons, Acqualina Resort & Residences, Yahoo!, American Airlines, Wynn, Douglas Elliman and Corcoran. As an adjunct assistant professor, Limsky has taught journalism, film and creative writing at the City University of New York, Pace University, American University and other colleges.