I’ve written about this before but here is some more evidence that one should be careful in looking at housing vacancy data:
In early 2009 the Richmond, Virginia press wrote numerous articles after quarterly HVS data on metro area rental vacancy rates “showed” that the rental vacancy rate in the Richmond, Virginia metro area in the fourth quarter of 2008 was 23.7%, the highest in the country. This shocked local real estate folks, including folks who tracked rental vacancy rates in apartment buildings in the area. The Central Virginia Apartment Association, e.g., found that the rental vacancy rate based on a survey of 52 multi-family properties in the Richmond, VA metro area was around 8% — above a more “normal” 5%, but no where close to 23.7%. And while the HVS attempts to measure the overall rental vacancy rate (and not just MF apartments for rent), the data seemed “whacky.”
When I talked to Census folks back then, they said that there quarterly metro area vacancy rates were extremely volatile and had extremely high standard errors, and that folks should focus on annual data.
However, “annual average” data from the HVS showed MASSIVELY different rental vacancy rates in Richmond, Virginia than did the American Community Survey, which also produces estimates of the vacancy rate in the overall rental market…
There are several other MSAs where the HVS rental vacancy rates just look plain “silly.” Some Census analysts agree that the HVS MSA data aren’t reliable, and even that several state data aren’t reliable, but, well, er, the national data are probably “ok” – which they are not.
If you want to read more on the issue, there are a number of links at the bottom of the story.
If the estimates are so far off from other estimates generally regarded as being reliable like the American Community Survey or the decennial Census, it would look like a new system is needed to calculate the quarterly vacancy rates.
I wonder how much these figures could hurt a particular community. Take the case of Richmond: if data suggests the vacancy rate is the highest in the country even though it is not, is this simply bad publicity or would it actually affect decisions made by residents, businesses, and local governments?