Is now a good time to purchase a second home?
Question: We are considering purchasing a second home in Summit County, CO…we are nervous about the economy, of course, but it has been a dream of ours for a very long time. Is now a good time?
Answer: Good question! Yes, there is cause to be nervous about the market and the global economy, AND the things that you love about Summit County and the benefits that owning here will bring to your family are priceless. Sometimes it helps to take a look at what the rest of the country is doing…. according to Keeping Current Matters and a report from the National Association of Realtors, vacation homes sales were on the rise in 2012!
“The American desire to own a second home as a vacation home is alive and well!
The National Association of Realtors analysis of U.S. Census Bureau data shows there are 7.9 million vacation homes in the U.S. Their 2013 Investment and Vacation Home Buyers Survey shows vacation home sales improved in 2012.
NAR Chief Economist Lawrence Yun said favorable conditions are driving second-home sales:
“We had a strong stock market recovery, which helps more people in the prime ages for buying vacation homes. Attractively priced recreational property is also a big draw.”
Here are the key findings from the report:
- Vacation-Home sales rose 10.1 percent to 553,000 from 502,000 in 2011
- Sales accounted for 11% of all transactions last year, unchanged from 2011
- 35% of vacation homes purchased in 2012 were distressed homes
- The typical vacation-home buyer was 47 years old
- The median household income was $92,100
- Buyers plan to own their recreational property for a median of 10 years
- 29% said they were likely to purchase another vacation home within two years
- 78% of all second-home buyers said it was a good time to buy (compared with 68% of primary residence buyers)
Reasons for Purchasing
Lifestyle factors remain the primary motivation for vacation-home buyers:
- 80% want to use the property for vacations or as a family retreat
- 27% plan to use it as a primary residence in the future
- 23% plan to rent to others
- 23% wanted to diversify their investments or saw a good investment opportunity
- 45% of vacation homes purchased last year were in the South
- 25% in the West
- 17% in the Northeast
- 12% in the Midwest
The vacation home buyer purchased a property that was a median distance of 435 miles from their primary residence
- 34% were within 100 miles
- 46% were more than 500 miles
- 46% of vacation-home buyers paid cash in 2012
The median down payment was 27%, the same as in 2011
So, while you can never be 100% certain about the real estate market, signs are pointing toward increased consumer confidence in the market.
For answers to your real estate questions, call Allison at 970-468-6800. Email - [email protected]. Her philosophy is simple, whether buying or selling, she understands that the most important real estate transaction is yours. Want to know the value of your Summit County property? Visit www.SummitHomeValue.com