Why are so many homes unemployed?

[phk]

Theories of unemployed labor are a subset of theories of unemployed resources.

The U.S. housing vacancy rate--an unemployment rate for homes--is at its highest level since at least 1965 (see figure).  Why?  Is it sticky prices? Lack of aggregate demand? Structural?



House prices may be sticky but they have fallen a lot--maybe not enough--but they have fallen a lot more than have wages.  On the other hand, house prices rose a lot more than wages. Maybe house prices are sticky relative to the required variation in market clearing levels.

What about lack of aggregate demand?  The homeownership rate was 67.2 in 2000 and today it's 66.9.  Thus, we don't have too great a supply of houses in the aggregate so aggregate demand is likely a factor.



Is the problem structural?  It does seem that we have too many houses in the South and the West where the boom was concentrated.  If we think of the unemployment rate as a measure of where there are too many houses then the following figure shows that there is a positive correlation between the home vacancy rate and the unemployment rate.  It's not as tight as one might expect, however.  California, for example, has a high unemployment rate but a home vacancy rate slightly below the national average and many states such as Wisconsin have plenty of unemployment but a very low home vacancy rate.

[memphis]

Fuuny wording, but in short, it's because people can't either afford them or don't want them at the going price. Oftentimes, sellers refuse to sell at today's prices because they can't or won't take a loss. Other properties are in such bad condition that it would cost more to purchase them and make them livable than the property would be worth post-renovation. I can't tell you how many people I know who are moving back in with mom and dad.

[memphis]

We need a pilgrimidge of hundreds of thousands from the slums of LA to the empty suburbs of Arizona (and likewise projects throughout the country).  It might kill two birds with one stone; distribute our housing resources vastly more efficiently and create new constituencies for the Democratic Party.

I think the people of Arizona would rather have ghost towns than a mass importation of L.A.'s slum dwellers. That's pretty much what their controversial new law was all about.

[SPC]

Here's some good answers: http://www.youtube.com/watch?v=m6G1rq5LdA4
http://www.youtube.com/watch?v=-U4R36WjFCI&feature=channel
http://www.youtube.com/watch?v=3-7feNWRwig&feature=channel
http://www.youtube.com/watch?v=PO_kjoKkhv8&feature=channel

[Ban my account ffs!]

Here's some good answers: http://www.youtube.com/watch?v=m6G1rq5LdA4
http://www.youtube.com/watch?v=-U4R36WjFCI&feature=channel
http://www.youtube.com/watch?v=3-7feNWRwig&feature=channel
http://www.youtube.com/watch?v=PO_kjoKkhv8&feature=channel

Yes.  The reason the housing vacancy rate is so high is because we have a minimum wage. 

I'd say it's an overabundance of housing with somewhat sticky prices.  Also, the glut of housing is located in areas hurt worst by the recession... which is why nobody wants to buy these already built houses.

In contrast, areas less hurt by the recession have much lower rates of housing vacancy because
1)  People are better able to afford new homes
2)  There were fewer empty homes to begin with

[Cubby]

Because the supply of homes exceeds the demand due to over-building of houses during the last decade. Too many houses were built in the South and West with no thought to who would be buying them and some people who did buy them ended up not being able to pay for them (i.e. Subprime Mortage Crisis)

[Ban my account ffs!]

Rather than pumping our income into homes.. we need to start repairing and expanding our public infrastructure.  We've spent like 30 years overbuilding houses.  It's time we really made a commitment to a national, well connected high speed passenger rail network, revamping and expanding our interstate and federal highways, and upgraded our electrical grid to 21st century standards and try to prepare for a possible disruption caused by solar activity.

[Cubby]

Rather than pumping our income into homes.. we need to start repairing and expanding our public infrastructure.  We've spent like 30 years overbuilding houses.  It's time we really made a commitment to a national, well connected high speed passenger rail network, revamping and expanding our interstate and federal highways, and upgraded our electrical grid to 21st century standards and try to prepare for a possible disruption caused by solar activity.

I agree. After the 2003 Northeast Blackout, there was all this talk in the media about how we needed to update the electrial grid to prevent this from happening again. But within a month or two everyone forgot, so the same thing could easily happen again. My guess is that building houses enriches private companies and developers, while building infrastructure would be done by the government (which most Americans hate regardless of who's in office) and may require taxes to be raised, which would hurt whichever party suggests the idea.

[Ban my account ffs!]

Rather than pumping our income into homes.. we need to start repairing and expanding our public infrastructure.  We've spent like 30 years overbuilding houses.  It's time we really made a commitment to a national, well connected high speed passenger rail network, revamping and expanding our interstate and federal highways, and upgraded our electrical grid to 21st century standards and try to prepare for a possible disruption caused by solar activity.

I agree. After the 2003 Northeast Blackout, there was all this talk in the media about how we needed to update the electrial grid to prevent this from happening again. But within a month or two everyone forgot, so the same thing could easily happen again. My guess is that building houses enriches private companies and developers, while building infrastructure would be done by the government (which most Americans hate regardless of who's in office) and may require taxes to be raised, which would hurt whichever party suggests the idea.

Then put it on the ballot.  We approved a constitutional amendment that raises the sales tax by 0.375% in 2008 for conservation and arts funding.  I think roads and transit would be a gimme in comparison.

[SPC]

Here's some good answers: http://www.youtube.com/watch?v=m6G1rq5LdA4
http://www.youtube.com/watch?v=-U4R36WjFCI&feature=channel
http://www.youtube.com/watch?v=3-7feNWRwig&feature=channel
http://www.youtube.com/watch?v=PO_kjoKkhv8&feature=channel

Yes.  The reason the housing vacancy rate is so high is because we have a minimum wage. 

I'd say it's an overabundance of housing with somewhat sticky prices.  Also, the glut of housing is located in areas hurt worst by the recession... which is why nobody wants to buy these already built houses.

In contrast, areas less hurt by the recession have much lower rates of housing vacancy because
1)  People are better able to afford new homes
2)  There were fewer empty homes to begin with

Sorry, I thought the poster was referring to individual unemployment. Although, the fourth video touches a little on the boom-bust cycle which caused the housing bubble in the first place.

[Cubby]

Then put it on the ballot.  We approved a constitutional amendment that raises the sales tax by 0.375% in 2008 for conservation and arts funding.  I think roads and transit would be a gimme in comparison.

Its very difficult to get citizen-sponsored initiatives on the ballot in Connecticut. I can't remember the last time we had one, the closest was a motion in 11/2008 to have a state constitutional convention, which failed. That was an indirect way of having a ballot question.

[opebo]

Lack of demand, which is another way of saying excessive inequality/lack of redistribution.

[opebo]

Here's some good answers: http://www.youtube.com/watch?v=m6G1rq5LdA4
http://www.youtube.com/watch?v=-U4R36WjFCI&feature=channel
http://www.youtube.com/watch?v=3-7feNWRwig&feature=channel
http://www.youtube.com/watch?v=PO_kjoKkhv8&feature=channel

Oh my god I actually wasted my time looking at the first one.  What offensive garbage.

[Ban my account ffs!]

Here's some good answers: http://www.youtube.com/watch?v=m6G1rq5LdA4
http://www.youtube.com/watch?v=-U4R36WjFCI&feature=channel
http://www.youtube.com/watch?v=3-7feNWRwig&feature=channel
http://www.youtube.com/watch?v=PO_kjoKkhv8&feature=channel

Oh my god I actually wasted my time looking at the first one.  What offensive garbage.

Yeah.. I stopped at "Your'e unemployed because you'll get arrested if you get a job"

Provided that you work for someone for less than minimum wage.

Which is a bunch of poo.. just put 'em on salary and work them until they can't take it anymore.  (Personally, I think salary pay should be strictly regulated.  You should still get "overtime" based on your average hourly wage times at least 1.5 for working more than 40 hours per week.

If people don't want to pay overtime, then hire more workers.

[SPC]

Here's some good answers: http://www.youtube.com/watch?v=m6G1rq5LdA4
http://www.youtube.com/watch?v=-U4R36WjFCI&feature=channel
http://www.youtube.com/watch?v=3-7feNWRwig&feature=channel
http://www.youtube.com/watch?v=PO_kjoKkhv8&feature=channel

Oh my god I actually wasted my time looking at the first one.  What offensive garbage.

Yeah.. I stopped at "Your'e unemployed because you'll get arrested if you get a job"

Provided that you work for someone for less than minimum wage.

Which is a bunch of poo.. just put 'em on salary and work them until they can't take it anymore.  (Personally, I think salary pay should be strictly regulated.  You should still get "overtime" based on your average hourly wage times at least 1.5 for working more than 40 hours per week.

If people don't want to pay overtime, then hire more workers.

If that person's work is not worth more than the minimum wage, than the business owner would be better off not hiring anybody. What is wrong with two people coming to a mutual agreement about a mutually beneficial exchange?

[opebo]

If that person's work is not worth more than the minimum wage, than the business owner would be better off not hiring anybody. What is wrong with two people coming to a mutual agreement about a mutually beneficial exchange?

Two reasons: because the people working for less than minimum wage would soon be dead, and the 'two people' in the 'exchange' are an empowered aristocrat and the victim of his violence.

[SPC]

If that person's work is not worth more than the minimum wage, than the business owner would be better off not hiring anybody. What is wrong with two people coming to a mutual agreement about a mutually beneficial exchange?

Two reasons: because the people working for less than minimum wage would soon be dead, and the 'two people' in the 'exchange' are an empowered aristocrat and the victim of his violence.

So it would be better for that people to be earning nothing than for them to earn something less than the minimum wage? If working below the minimum wage is not enough to sustain a living, then how come the illegal immigrant population (who work sub-minimum wage occupations more commonly due to their "illegal" status) managed to survive?

[opebo]

So it would be better for that people to be earning nothing than for them to earn something less than the minimum wage?

Yes, obviously.  Better to fight than lick boots, SPC.

If working below the minimum wage is not enough to sustain a living, then how come the illegal immigrant population (who work sub-minimum wage occupations more commonly due to their "illegal" status) managed to survive?

I don't know, SPC, perhaps they have special fatty humps that we lack, storing the food from Mexico.  But seriously, man, your solution to an economy which has collapsed due to extreme inequality and lack of demand is to lower wages?

Why do you think anyone should accept this politically imposed servile status?

[SPC]

Opebo's classism and racism used to justify his world view deserve no response.

[Bo]

Because many people are buying their time to see if housing prices go down even further.

[memphis]

Clearly the problems in our economy stem from a lack of $4/hour jobs.